It's been a tough decade for communications. The sector was hammered during the ''dot.com'' bust during the early part of the decade. More recently, the business has been battered by the current IC downturn, causing another shakeout in the arena.

Now, the wireline market looks better, thanks in part to a new and sudden demand for 10-, 40- and 100 Gbit/s Ethernet networks in cellular networks, datacenters, WANs and related applications. To some extent, wireless, storage and other markets are heating up as well.

The telecommunications-based application-specific analog IC market is expected to grow 12 percent in 2009, after a 16 percent drop in 2008, according to IC Insights Inc. The telecommunications-based logic IC market is expected to climb 3 percent in 2009, after 15 percent growth in 2008, according to IC Insights.

Many say the IC dowturn is over. The communications chip market itself has already hit bottom and there is finally some visibility in the market, said Paramesh Gopi, president and chief executive of AppliedMicro (Sunnyvale, Calif.).

''I am cautiously optimistic,'' Gopi told EE Times in a recent interview at the company's headquarters here. ''Order patterns have stabilized. Today, there is visibility in terms of quarters.''

Although the market is recovering, it is unlikely that the overall communications chip market will see the same growth numbers this year, as compared to ''pre-recession'' figures, he said.

In other words, don't look for a quick bust-to-boom cycle. ''I think it's going to be a long recovery,'' he said. ''I don't see a snap back (in business) or a slowdown.''

What's driving the slow recovery? Thanks to a shakeout, there are fewer carriers and OEMs. Like the pent up demand in IT spending, communications chip makers are still waiting for the carriers to open up their purse strings.

There has been a ''10-year famine'' in terms of spending by the carriers on infrastructure, Gopi said. ''They are just sitting on piles of cash.''

One of the new opportunities for IC vendors is datacenters, which are deploying LAN/WAN networks. Amazon, Google and Yahoo are leading the charge.

In general, the market is also seeing an ''inflection point'' for 10-Gbit/s Ethernet networks, he said. AppliedMicro also sees a big market for so-called Optical Transport Network (OTN) technology. Starting in 2010, Verizon plans to deploy for its Fios network only OTN systems that support both optical transport and packet processing. Other OEMs including HuaWei, and Tellabs are working on similar systems.