EL SEGUNDO, CA – Riding the momentum of continued strong demand growth for mobile handsets, sales of semiconductors for wireless products rose at a faster pace than the overall chip market in 2007, according to iSuppli Corp.

The global wireless semiconductor market generated $29.5 billion in revenue in 2007, up 7.6% from 2006. These figures consist of revenue from sales of application-specific semiconductors – excluding memory – for wireless applications, including mobile handsets, wireless infrastructure equipment, wireless LANs and connectivity products.

In contrast, the global market for all kinds of semiconductors grew by only 3.3% during the same period, the research firm said.

Worldwide mobile handset shipments amounted to 1.15 billion units in 2007, rising by a robust 16.1% year-over-year. This helped keep the wireless semiconductor market on a high growth track, with six of the Top-10 suppliers achieving double-digit increases in revenue for the year.

“iSuppli in mid 2007 reported that Qualcomm Inc. had usurped Texas Instruments Inc. as the world’s leading supplier of semiconductors for wireless applications during the initial three months of 2007, the first time this had occurred on a quarterly basis,” said Francis Sideco, senior analyst, wireless communications for iSuppli. “Qualcomm held onto the lead for the entire year of 2007.”

Qualcomm handily outgrew the overall wireless semiconductor market, with its revenue in this segment rising 24.1%. The company shrugged off its legal woes and benefited from strong demand for its EvDO and WCDMA/HSPA chips. Company market share rose to 19.1%, up from 16.5% in 2006.

Texas Instruments’ performance in 2007 was not as strong, with the company’s share declined to 16.7%, down from 19.4% in the prior year. Company revenue declined by 7.7%.

“Texas Instruments’ results were influenced by a confluence of events in 2007 –especially occurrences in the market for high-end 3G semiconductors,” Sideco said. “The year 2007 brought a market slowdown in Western Europe, where Texas Instruments’ customers have a large presence. This, combined with Ericsson Mobile Platform’s rising use of STMicroelectronics parts in some of its 3G digital baseband platforms, conspired to diminish Texas Instruments’ market share in 2007,” Sideco said.

STMicroelectronics surged to the No.-3 ranking, up from fifth in 2006, because of a 14.4% rise in revenue. The company’s strong performance was a result in part of the previously mentioned usage of its 3G digital baseband chips by EMP.

Infineon posted an impressive 54.3% increase in revenue, allowing it to move to No. 4, up from No. 8 in the prior year, said iSuppli.

iSuppli’s 2007 rankings illustrate the consolidation of market demand among the top semiconductor suppliers. The wireless semiconductor market is structuring itself to match the concentration of market share among the Top-5 mobile handset OEMs.

“Scale is sine qua non to compete in today’s wireless semiconductor market,” Sideco said. “Chip suppliers need at least $1 billion in revenue to even sit at the wireless table. However, scale goes beyond revenue and extends into having sufficient resources to support a broad and cutting-edge product portfolio, which must include single chip and reference platform solutions.”

Wireless semiconductor suppliers with annual revenue greater than $1 billion increased their collective share of the market to 62% in 2007, up from 51% in 2006. Sideco projects this trend will continue in 2008.