Glimmer of hope for slumping DSL IC market

30 January 2002 News

The success of the Digital Subscriber Line (DSL) chip market in 2001 was tame in comparison to that of 2000, according to In-Stat Group. A significant drop in average selling prices driven by intense competition between manufacturers, deployment delays on the part of Competitive Local Exchange Carriers (CLECs) and Original Equipment Manufacturers (OEMs), and a slew of cancelled orders toward the end of 2000, resulted in a gross oversupply of DSL Integrated Circuits (ICs) in 2000 and leading into 2001.

2001 was a corrective year for the DSL IC market. After 2000, in which unprecedented growth led to a $1,2 bn market, 2001 was plagued by excess chip inventory in the US. However, as numerous CLECs went out of business and OEMs have written off inventory, with some deciding to exit the market altogether, this situation has corrected itself.

In-Stat predicts hope on the horizon for the market. The strength of emerging Asian and European DSL markets in 2001 has enabled DSL to remain a successful business for several DSL IC and equipment companies. DSL IC vendors are also evolving to integrate more functional blocks into their solutions, meeting an increased demand from their customers for both home networking and Voice over Packet capabilities. Moving forward, DSL IC manufacturers cannot stand still. They must provide additional technologies to their DSL chip portfolios in order to remain competitive, believes In-Stat.

www.in-stat.com

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