SAN FRANCISCO—Projections for the overall semiconductor industry in 2009 are dire, but favorable trends in the handset market should keep the market for RF chips from crashing this year and ready to bounce back more quickly than many industry segments, an analyst said Monday (March 2).

Analysts are now forecasting overall chip industry contraction on the order of 20% or more.  But indications are that the RF semiconductor industry may contract closer to 1 percent in 2009 and bounce back with double digit growth in 2010 and beyond, according to Tom Hackenburg, an analyst at IMS Research (Austin, Texas).

Hackenburg said the RF chip market will benefit from lower resistance to reduced consumer purchasing power in the mobile handset market, advancements in 3G and 4G technologies and consumer demand for more advanced smartphones.

Overall, high-performance semiconductors such as 32- and 64-bit processors and 32- and 64-bit core-based ASIC, ASSP and FPGA products are likely to see less than 5 percent contraction for 2009, while many applications will actually see slight growth, Hackenburg said.

While its clearly going to be a challenging year for semiconductors, the brunt of the damage will be done in commodity segments such as memory, which could see a 30 to 40 percent decrease in unit shipments in 2009, Hackenburg said.

"Specific applications segments will be more resilient in response to the economic contraction," Hackenburg said through a statement.

Economic contraction is likely to push the trend for higher integration to decrease bill-of-material costs in the handset industry, according to Hackenburg. He said interesting solutions are likely to merge in the RF front-end using single PAs in front-end modules that cover multiple bands as well as a large growth in integrated multi-mode solutions.

In the digital baseband segment, Hackenburg said he expects to see more digital solutions to RF processes to the point of single chip solutions and other highly integrated cores. Low power processors to perform energy management will also rise in prominence, he said.

High-performance modules for voice enhancements, data connectivity, videography, multimedia and alternative displays will be needed to support a distinct trend toward smartphones and advanced feature phones, Hackenburg said.