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Due to the complexity of chips for DVD recorders along with integration and other issues, semiconductor revenue for DVD players is expected drop at a compound annual growth rate (CAGR) of 21 percent between 2004 and 2008, to $637.8 million in 2008, according to the latest market research from IDC.

At the same time, DVD recorder semiconductor revenue is predicted to grow at a CAGR of 39.1 percent to $3 billion in 2008, with overall DVD semiconductor revenue growing from $2.4 billion to $3.7 billion driven by DVD recorder semiconductors, the San Mateo, Calif.-based firm predicted.

?Total DVD semiconductor revenue will grow steadily through the forecast period of 2004-2008, with a notable decline in DVD player semiconductor revenue and a significant ramp in DVD recorder semiconductor revenue,? said IdaRose Sylvester, senior research analyst for semiconductors at IDC, in a statement.

?DVD recorder semiconductor revenue will drive and support the DVD semiconductor revenue through this forecast period, while offering both significant opportunity and risk to industry participants,? she added.

Other trends in the DVD player / recorder semiconductor market show that integration is the leading trend and leading cost reduction driver in the forecast for the industry. DVD recorder volume is expected to gain significant momentum as DVD player volume begins a rapid decline. Also, DVD player systems are almost maxed out on semiconductor integration, but DVD recorder semiconductor integration is just starting.

Further, due to the complexity of DVD recorder systems, semiconductor bill of material costs will remain relatively high throughout the forecast period while regional variations in end market demands will pose strategic challenges for DVD recorder semiconductor companies.