A new market for GaAs PAs

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The emerging market for so-called femtocells will explode over the next five years, providing a key new application for power amplifier (PA) components, and a likely boost for makers of GaAs devices.

Reports from ABI Research, In-Stat and Wintergreen Research all predict a sharp increase in deployments of femtocells, with accompanying demand for the various semiconductor components that they require.

Femtocells, which are miniature cellular base stations, are increasingly viewed as the best solution to providing reliable broadband cellular connectivity inside homes and offices.

As anybody living in a house with thick stone walls will attest, indoor cellular reception can be extremely variable. That’s because the high-frequency signals being transmitted between a cellular handset and a remote base station are absorbed to varying degrees depending on the specific location of the two.

For conventional mobile services like voice calls and simple messaging, that isn't much of a problem – but with demand for data-hungry services increasing, broadband coverage needs to be less patchy and more reliable.

Now it seems that some network operators have concluded that the most cost-effective way of ensuring that kind of coverage is for customers who want broadband cellular access to deploy femtocells in their homes and workplaces.

The US market analysis company Wintergreen Research recently issued a report forecasting that global shipments of the tiny base stations, which today stand at virtually zero, will grow to nearly 48 million in 2012 as the predicted cost of the cells drops to just $100.

In a less bullish report, In-Stat predicts 31 million unit shipments of femtocells and related picocell and microcells by the same year.

"One barrier to roll-out is the need to reduce the cost per unit of the hardware," states the Wintergreen report. "Initially it may be that operators provide femtocells to customers as part of a service plan."

Wintergreen analysts Susan Eustis and Ellen Curtiss note that major companies such as fiber-optic networking giant Cisco Systems have a vested interest in femtocells, because the technology could ultimately be integrated into consumer hardware like set-top boxes, which Cisco already sells.

"Calls would go from the handset, to the femtocell, down the broadband connection, and back onto the cellular network," they explain. "This beats having to set up lots more [conventional] base stations."

In another report, Stuart Carlaw from ABI Research predicts that the market for semiconductors used in femtocell applications will grow from less than $72 million in 2008 to nearly $2 billion by 2013.

As always, that market will be dominated by silicon devices, but femtocells will also require power amplifiers operating at cellular frequencies – an application dominated by GaAs at the handset level, but by silicon LDMOS in conventional base stations.

Because femtocell signals are designed to operate over only a short range, the high power of silicon LDMOS technologies is not a pre-requisite, suggesting that incumbent handset PA suppliers like RF Micro Devices and Skyworks Solutions may be at an advantage.

Skyworks Solutions has already made inroads into the early market, and is supplying Samsung with four types of components for use in the Korean firm's femtocells, including the wideband-CDMA SKY77410 power amplifier.

Although the unit demand from femtocells might not match that from mobile handsets initially, the Wintergreen analysts believe that when the cost of the technology drops to $100, things will really take off, with an anticipated 95.5 million unit shipments in 2014.

The numbers quoted by the various analyst reports differ widely, but they do all agree that femtocells are emerging as a key cellular technology:

"3G services will have limited success without addressing the indoor coverage issue," says In-Stat's report. "The cost to address these shortcomings with traditional macro base station solutions is too high, and not possible for most mobile operators."

In-Stat analyst Allen Nogee added: "Microcells, picocells, and femtocells address these challenges in a much more cost-effective manner."

"By providing smaller and less powerful base stations in smaller areas, like public spaces, offices, and even homes, carriers can provide better coverage in more specific areas without a huge capital investment."

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