IP camera boom to lift semiconductor market

Mar 6, 2006 3:14 PM

The exploding market for Internet Protocol (IP) video surveillance cameras and servers will generate nearly a $1 billion opportunity for semiconductors in 2010, according to a recent market research report from iSuppli Corp.
Revenue from shipments of IP video surveillance cameras nearly doubled in 2005, and will continue to grow at 87.9 percent from 2004 to 2010, to reach $3.9 billion. By the end of 2009, the worldwide IP surveillance camera market will grow larger than the conventional Closed Circuit Television (CCTV) camera segment. Meanwhile, the market for IP surveillance servers is expected to expand to $1.3 billion in 2010.
Semiconductor technologies are enabling dramatic new features in IP video surveillance cameras and servers. The market for such semiconductors will grow in parallel with rising sales of IP video equipment.
As cameras transition to digital technology, manufacturers are making smarter products that include features like image recognition, image tracking and response and alert systems. The adoption of IP cameras and IP servers, also known as streamers, is perhaps the most significant trend in video surveillance today. This trend is driving increased reliance on semiconductor technology in the surveillance market.
An IP camera typically integrates video capture, video encoding/processing and network interface functions. Thus, video signal processor chips that support these functions are among the most differentiated and lucrative semiconductor opportunities in the video surveillance market.
The high-end of the camera/server market provides opportunities for additional coprocessors beyond video signal processors, such as general-purpose processors. Because these systems are more complex and demanding, as well as less cost-sensitive than low-end products, they often support additional features such as on-board storage or other system-level interfaces. Finally, IP servers and high-end IP cameras may also have embedded storage, either in the form of a hard-disk drives or removable flash memory cards.
Surveillance cameras also are making a gradual transition toward CMOS image sensors and away from traditional Charge-Coupled Devices (CCDs). Each type of image sensor has advantages and disadvantages, but over time, the shortcomings of CMOS image sensors are decreasing.
Other technology trends in the surveillance camera market include a migration from motion JPEG to MPEG4, the adoption of 802.11 in some segments and support for power over Ethernet. Beyond video processing, image sensing and connectivity options, analog and power semiconductors also will find a growing market in IP surveillance cameras.
iSuppli is an electronics research firm based in El Segundo, Calif. The scope of iSuppli research encompasses component and application markets; emerging technologies; inventory; component pricing; and manufacturing.

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