Mark LaPedus EE Times (12/09/2009 2:21 PM EST)

SAN JOSE, Calif. -- The touchscreen chip market is like the Wild West.

A plethora of companies are entering the fledging market--and for good reason: Apple's iPhone seemed to have ignited a revolution for touchscreen technology in cellular phones. Netbooks, PCs and other products are moving towards touchscreen technology.

Sources believe that Apple designs its own touchscreen ASIC for the iPhone. But many handset (and non-handset) OEMs are buying new, low-cost merchant parts.

Atmel, Cypress, IDT, Microchip, Renesas, Synaptics and others are selling touchscreen chips for handsets and other products. Synaptics was one of the early leaders for handsets, but Atmel and Cypress are coming on strong. The others are scrambling to get their foot in the door.

It's still early in the game. Analysts make their cases for the early winners in the arena:

The case for Atmel Inc.

Craig Berger, an analyst for FBR, on Atmel's maXTouch products: ''MaXTouch touchscreen products likely to ramp in 2H10 with samples in four of top five handset manufacturers; Droid (from Motorola) already launched. Current (design wins) include the Motorla Droid and Samsung's Galaxy, Blue Earth, and Instinct handsets.

On pricing, ASPs are likely around $3 per phone. We do believe that Atmel can get one-third of the non-Apple smartphone market over time, or roughly 75 million handsets annually, a meaningful opportunity indeed.''

Hans Mosesmann, an analyst for Raymond James, on Atmel: ''Touch-related revenues generated strong 3Q '09 growth and were driven by touch screen products. Atmel began volume shipments to Motorola for their next generation Android based smartphones -- the CLIQ and the Droid.

MaXTouch products are being designed into and evaluated for other high volume applications such as netbooks based on the Windows 7 operating system, printers, and portable electronic devices like handheld gaming, GPS, and others. Atmel is optimistic that maXTouch will begin to generate substantial revenue growth in 2H10 and throughout 2011.''

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