The application specific integrated circuit (ASIC) market will grow by about 5% in 2008 after falling 2% in 2007 because of weaker demand and falling prices. Buyers can expect further price declines next year, although demand will be stronger and the market will increase from about $15.5 billion in 2007 to $16.2 billion in 2008, according to researcher IC Insights.

About seven different product types comprise the ASICs market, but standard cell devices is the largest, followed by programmable logic devices and full custom.

The standard cell segment will decline from $8.7 billion in 2006 to $8.3 billion in 2007, according to researcher IC Insights. However, the segment will bounce back in 2008 growing to $8.8 billion in 2008 and $10.7 billion by 2011.

Standard cell devices are often used because of their low per/die costs and their small size, says Bill McLean, president of IC Insights in Scottsdale, Ariz. However, they have high nonrecurring engineering charges because of expensive photo mask and design costs. Consequently, they are used in high-volume applications because of the ability to amortize the photo masks and design charges over a large number of units, according to McLean. Standard cells ASICs tend to be used in consumer electronics equipment because those products are high-volume products.

Standard cell is also used in system-on-chip devices. Such devices have more 100,000 usable gates, memory and microprocessor, microcontroller or digital signal processor functions.

Programmable logic devices are the second largest ASICs segment. The PLD market will dip from $3.7 billion in 2006 to $3.6 billion. However, revenue growth will resume in 2008 as the PLD segments grows to $3.8 billion in 2008 and to $4.8 billion by 2011. PLDs are logic circuits consisting of one or more switch matrices that can be configured into higher level logic patterns. Some devices may be one-time programmed using built-in fusible links.

Full custom is the third largest ASICs product group. As the name implies, most of the design is customized and does not use predefined cells. The circuitry is interconnected or laid out one transistor at a time and mask layers are customized for the end user.

The market for full custom ASICs will decline in 2007. It fell from about $2.7 billion in 2006 to $2.6 billion. But will rise to $2.9 billion in 2008 and $3.2 billion in 2011.