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Linley Newsletter

ASSPs Hold Their Own in Comms

June 19, 2018

Author: Bob Wheeler

Big and stable yet fragmented—that’s the communications-IC market in a nutshell. We track sales of application-specific standard products (ASSPs) as well as embedded processors and FPGAs. Aggregating sales of these chips, communications systems consumed $13 billion worth in 2017. That figure represents only 1.7% growth in 2017 following an outstanding 2016.

The weak wireless-infrastructure market continued to hold back the leading FPGA and embedded-processor vendors in that segment, damp­ening overall growth. Wired communications performed well across most seg­ments, but a down year for optical components also held overall ASSP growth to 1.7%. Hyperscale data centers drove ex­cellent growth in 10Gbps-and-above Ethernet switching, whereas decelerating Chinese PON deployments constrained broadband growth.

Embedded pro­cessors and FPGAs for communications are relatively small; combined, they’re less than half the size of the ASSP market. In 2017, the three categories performed similarly, with FPGAs underperforming slightly due to their wider use in wireless infrastructure. The largest of our top-level ASSP categories are Ethernet, broadband, and the catchall “other” cate­gory, respectively earning industry revenue of $4.0 billion, $2.5 billion, and $2.4 billion in 2017. The smallest category, processing, includes the network-processor and security-accelerator subcategories.

Despite the rise of software-defined networking (SDN) and network functions virtualization (NFV), processors and FPGAs haven’t meaningfully displaced ASSPs. In many designs, these chips are instead complementary, with ASSPs offering the best power/performance and processors or FPGAs adding customer programmability.

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