Long dominated by Ikanos Communications, the VDSL semiconductor market recently has become much more competitive, according to IHS iSuppli. The market researcher also projects that new subscribers to VDSL service are set to nearly quadruple by 2014 as more competitors begin to ramp up their support for the technology.

While Ikanos still leads with 55% market share, that figure is down from 75% only a year ago with the trend unlikely to stop anytime soon, IHS said. Lacking in IP to create a single-chip gateway solution, Ikanos instead has centered its focus on advanced VDSL technology such as vectoring and bonding. Such a strategy will continue to supply the company with the most advanced technology, but without an integration roadmap, the door also has opened for competitors Broadcom and Lantiq to grab their fair market share, IHS indicated.

Moreover, a new competitor with a history in the ADSL market, Ralink Technology - which recently acquired ADSL maker TrendChip Technologies - will soon bring a VDSL chip to the market in the first quarter of 2011, IHS noted. Ralink promises to bring a new level of cost competitiveness to the VDSL market, further squeezing Ikanos.

The number of new annual VDSL subscriber additions will grow to 60.1 million in 2014, up from just 15.6 million in 2009, according to IHS. In 2010, a total of 23.3 million new VDSL subscribers were added.

"As the broadband market switches from a focus on data to stressing wideband multi-service and multimedia, fatter pipes to receive content are becoming more desired," said Lee Ratliff, senior analyst for broadband and digital home at IHS. "Broadband rates of 1 to 5Mbps were adequate when people were only surfing the Internet, but peer-to-peer file sharing, online gaming, streaming audio, VoIP and IPTV now all could be operating within one home. Such heavy activity points likely to a future in which 50 to 100Mbps will be standard - which fits exactly with VDSL's capabilities."

In addition, IHS believes that VDSL chipset pricing will decline, thereby increasing integration of the technology among broadband suppliers and consumers. This will result in rapidly decreasing ASPs and innovation among chipset features.