After years in the doldrums, global VoIP semiconductor sales have finally begun to experience significant growth as service providers, businesses and consumers wake up to the value of IP convergence.

According to the latest research from IDC, accelerating adoption across all system segments will enable the market to reach $1.7bn by 2008, with a healthy compound annual growth rate of 48 per cent for 2003-2008.

Within this market, the broadband gateway segment targeting consumers is expected to drive the strongest increase, as DSL and cable modem customer premises equipment increasingly integrates VoIP functions.

"The transition to VoIP is well underway, with sales rising steadily for media gateways and soft switches within service providers, IP PBXs and IP phones within businesses, and broadband gateways within small businesses and consumer segments," said Sean Lavey, programme manager for semiconductor research at IDC.

"The semiconductor vendors building products that run at the heart of these designs will benefit from this migration, especially as standards continue to mature."

The analyst firm added that, to fuel the switch to VoIP, semiconductor vendors will need to show OEMs that they are committed to driving down costs in future designs and delivering more than just highly integrated chip products.

IDC's report expects semiconductor packages bundled with some key underlying software to become increasingly important in helping OEMs build solutions more quickly.