Although September digital signal processor (DSP) shipments were up 32.5 percent over the previous month, market research firm Forward Concepts has nevertheless slashed its forecast for DSP revenues for 2006.

Citing a severe drop in quarterly prices for DSP used in mobile phones, the firm has lowered its 2006 DSP revenue forecast to $8.4 billion, 10 percent to 15 percent below its prior expectations.

The “phenomenal” shipment increase was not enough to lift shipments for the entire Q3 beyond a 2.2 percent rise, to $2.2 billion, Forward Concepts said in a statement. Although the figures are much better on a unit basis, with quarterly shipments up 6.7 percent, the firm said the industry has seen a 4.3 percent drop in ASPs, largely because of a 10 percent decrease in prices of the chips destined for handsets.

Forward Concepts said that in view of the lackluster Q3 growth and lower cellular forecasts for Q4 by Nokia, Motorola and Texas Instruments Inc., and the recent problems at BenQ Mobile and Infineon Technologies, touted projections of billion unit cell phone shipments “will not happen in 2006.”

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