Moving mountains
Steven Fyffe, Contributing Editor -- 2/1/02
CommVerge
As Brian Halla walked the floor at the Comdex trade show last fall, he couldn't shake the feeling that something was missing. Sure, the cavernous Las Vegas Convention Center was packed with weary attendees, high-volume sales pitches, and ubiquitous banners displaying vaguely silly slogans such as "The technology you want." Still, the president and CEO of National Semiconductor felt that something was absent.
"You couldn't find a PC there," Halla observes, noting the irony that Comdex was originally created explicitly as a showcase for the personal computer. In other words, the PC was a no-show at its very own ball. Taking its place were legions of cell phones, PDAs, and other portable digital devices.
The change signifies a significant shift in the electronics industry—one Halla is far from alone in noticing. As the PC market stagnates, silicon companies recognize that convergence devices represent an enormous market for their chips. In fact, because of their sheer numbers, such gadgets symbolize an opportunity far larger than the PC market. And that fact has propelled Halla and his counterparts at other chip giants into action, each one dreaming of being the sole supplier for this massive market.
Will Strauss watches such trends with more than a passing interest. He runs a market research firm called Forward Concepts that specializes in tracking DSPs, the fast chips that are inside every cell phone in the world today. Ask him which chipmakers want to get their silicon into portable devices, and he replies: "All of them."
To understand why, look no further than the numbers. Last year was considered a disappointing one for cell-phone sales. Around 416 million cell phones were built, but only around 380 million were sold, Strauss says. Nevertheless, those numbers dwarf the roughly 125 million PCs that shipped. In 2006, cell-phone shipments will rise to 1 billion, and half of them will have built-in digital cameras, Strauss predicts.
"The amount of silicon in a PC is obviously more, but it shows you that the quantity we are taking about [in this market] is huge," Strauss says. Everyone wants to provide the "building blocks" for those multitudes of devices. However, Strauss warns, there isn't going to be room for everyone.
“The strategic value is how we marry hardware and software platforms, run applications and content. This is what will make winners and losers.”
Andrea Cuomo, STMicroelectronics
A brief survey of the market shows battles raging on many fronts. Intel wants not only to unseat the swaggering Texas Instruments from its position of dominance as the top DSP supplier to the cell-phone market but also to make its own platform the first choice for all types of wireless products. ARM is adding DSP capabilities to its processor blueprints, which might one day force traditional DSPs out of cell phones altogether. National Semiconductor is desperately trying to get more of its chips into all kinds of portable devices. STMicroelectronics is proclaiming a product roadmap of integrated hardware and software that covers all the bases for convergence product teams. And Motorola is asserting that when you're talking about wireless products, you want a partner that has proven experience.
Meanwhile, memory companies are developing low-power DRAM (dynamic RAM) they hope will replace expensive SRAM (static RAM) in the next generation of mobile devices. And the two leading makers of programmable-logic devices, Xilinx and Altera, are working on low-cost, low-power programmable devices that will keep all the different chips in these evolving systems talking to each other. (See the sidebar, "Side skirmishes.")
Analog man
National's Halla takes heart from the change he saw at Comdex. The manufacturers of all those cell phones, PDAs, and other devices, he notes, were differentiating their wares with better displays and better audio. "Comdex has become an analog show," he says. Of course, he would say that; his company has deep roots in analog chips.
Sitting at a conference table in Santa Clara, CA, where he presides over National's billion-dollar chip business, Halla stops spinning in his swivel chair for a moment to explain the counterintuitive nature of the analog business. The more digital appliances become, and the more multimedia services—such as video and music—that they offer, the more analog circuitry they need.
"There is much more analog circuitry inside a DVD player than a VCR," he says. "There is much more analog inside a high-definition TV than there is inside the old analog set. There is more analog inside a phone running in GSM mode than there ever was in an analog phone." All that adds up to a growing opportunity for National. "About 50 percent of the circuitry in a PDA is analog, compared to 10 percent in a PC, because all a PC is worried about is ones and zeros," Halla says.
Even though demand is growing for analog parts, Halla worries about the threat from Texas Instruments. TI offers not only its popular DSPs, which can be found in about 58 percent of the cell phones on the market, but also a deep catalog of analog components. That makes the company a one-stop shop for makers of cell phones and other devices.
“Within a couple of years, half of everything we do is going to be wireless. It will be half of our revenues.”
Brian Halla, National Semiconductor
"They have got a death grip on cell phones with their DSP and ARM-based architecture," Halla says. "Our analog and TI's DSPs either coexist, or TI, as a mixed-signal company, could gobble our analog into their DSP."
Suddenly, Halla pops up from his chair. "I have to show you something," he says. When he comes back from the office next door, he is holding a small box, from which he pulls a tiny pink- and cream-colored cell phone.
"We handed this phone to Ericsson and said, 'There is your new phone,'" Halla boasts. He goes on to explain that National initially had trouble getting Ericsson interested in building a phone based on National's chipsets. So Halla decided to go ahead and make them one himself. That meant finding a software company and a plastic factory willing to go along with the scheme.
The gamble seems to have paid off. "This is Ericsson's new volume runner," Halla says. "It is the smallest and lightest handset ever. The only thing Ericsson had to do was put a sticker on the back that says 'Ericsson/Sony.'"
Halla has high hopes for the phone, which is designed for next-generation 3G cellular networks. "We have $1.50 worth of silicon in that phone," Halla says pointing to a current Nokia handset lying on the circular conference table. "We have $20 in this phone," he says, waving the Ericsson model.
“Today, we are the only wireless semiconductor supplier that has wireless systems expertise. No one else can say that.”
Ed Valdez, Motorola
"Within a couple of years, half of everything we do is going to be wireless," he continues. "It will be half of our revenues," as compared to roughly a quarter today.
National is not the only company feeling the buzz. "There are just lots and lots of players here," says Jeff Bier, general manager of Berkeley Design Technology. "It is a big end market and everybody wants a piece of it."
Like Strauss's market research firm, Bier's company specializes in DSP analysis. Past the cubicles where his staff of about 12 engineers dissects set-top boxes and MP3 players, one finds a conference room. Inside there is a bookshelf full of thick, spring-bound volumes devoted to individual chips.
Pushy pushy
Bier stares off into space, as if looking into the future, and says there is a debate raging right now about whether the DSP will survive as the heart of the cell phone. Cell phones are built today using what is known as a dual-core approach. A DSP handles the communications, including modem functions and voice processing. Meanwhile, a general-purpose processor, typically a RISC (reduced instruction set computing) processor designed by ARM, handles the programs that run on the phone, such as user interface and control protocol stacks.
"As these two processors become more powerful, presumably either of them could take over the functions currently performed by the other," Bier says. "Is the ARM going to push out the DSP, or is the DSP going to push out the ARM?"
The cell phone is by no means the only battlefield on which this war is being fought. In fact, the evolution of the digital audio player provides a great example of how a general-purpose processor can replace a DSP, says Andy Murphy, a business development manager with ARM.
"If you look at what it takes to run an MP3 player, you see that it could be done just as effectively with an ARM-based chip," Murphy says. "Now, instead of being in a sole-source situation with TI, you have 20 suppliers all competing for your business, which drives cost down."
When ARM introduced its new v6 core at the Microprocessor Forum in San Jose last year, it featured some major changes that took over more DSP functions than ever.
Other companies, which sell processor blueprints—known as IP (intellectual property) cores in industry jargon—are blurring the line that used to separate DSPs from other processors. For example, Tensilica sells processor designs that "effectively span the gulf between what is DSP and what is RISC," says Chris Rowen, president and CEO.
“All of a sudden, these devices can be really productive tools for you and me. So you don’t have to lug your laptop around all the time.”
Vishwas Deshmane, Intel
"Overall, I think that IP will be a very healthy segment," he says. "People are increasingly looking at the processor as the basic building block."
In the future, cell-phone manufacturers will be able to decide between "a general-purpose processor with a DSP, or just a processor with discrete specific accelerators to handle specific applications," Murphy says. "I don't see a scenario where it is just a DSP."
Texas Instruments is keeping close tabs on ARM's expanding ambitions. TI was the lead partner on the development of the v6 core, says Stephan Bork, marketing manager for wireless terminals at Texas Instruments. He says DSPs will not be forced out of cell phones by ARM processors.
"That will not happen in the foreseeable future," he says. "Moving down 10 years, who knows, but right now it doesn't show any significant advantages."
Meanwhile, DSPs are expanding from their traditional role as communications processors and into a new task, running some of the multimedia programs that are suited to their high-speed operation.
"DSP technology is definitely branching out from the modem side into the application side, providing key advantages in applications like videoconferencing and video streaming," Bork says.
Other companies don't care which approach wins out. Software is going to be the defining factor, according to Andrea Cuomo, vice president of advanced system technology at STMicroelectronics.
"We have a strong roadmap on each of these components," Cuomo says. "We have a strong alliance with ARM, and we have a road map on DSP....The strategic value is how we marry hardware and software platforms, and run applications and content. This is what will make winners and losers."
The giant's awake
The name of one chipmaker in particular is virtually synonymous with the PC market. Now, with that market showing signs of a permanent slowdown, Intel is wholeheartedly embracing the wireless market.
"Intel has got more semiconductor factory capacity than any other company on earth," Strauss says. "If the PC growth long-term is slowing down, they are in trouble. So they are moving into the communications market. Well, what is the fastest growing communications market? Wireless."
Intel formed its Wireless Communications and Computing Group in late 1999. Home base is about halfway between San Francisco and the ski slopes of Lake Tahoe, in the satellite city of Folsom just outside Sacramento.
Intel has also established beachheads it refers to as "Wireless Competence Centers" in the strategic cities of Stockholm (the Scandinavian heart of the cell-phone industry), Tokyo (test market for 3G wireless networks), and Beijing (epicenter of what is now the world's single biggest cell-phone market). The group has about 2000 employees spread around the world.
Gene P Matter is the man responsible for Intel's Personal Internet Client Architecture (PCA). As principal engineer, it was his job to design the system that would lead Intel's charge into the wireless market.
Matter apologizes for his week-old beard (which actually looks remarkably neat), explaining that he's growing it for a part in a play where he's been cast as a bum. He adjusts his rounded glasses as he talks about his pet project.
"We are cross-platform, cross-network, cross-enterprise," Matter says. "You can run multiple operating systems; you don't have to use Symbian or Microsoft. [PCA] is not just tied to GSM. It works on 2.5G and 3G—wide-area networks and 802.11 [wireless LANs] and personal-area networks like Bluetooth."
Intel's PCA is a combination of a DSP core that Intel developed with Analog Devices (which Intel calls its Micro Signal Architecture), and an ARM core with special extensions (called StrongARM and XScale). "The implementations all use the same basic ingredients," Matter says.
Intel is also trying to change its image as a company that bullies its partners and customers. "We are trying to understand not just what we want, but what they want and figuring out what they need, even if they don't know it yet," Matter says.
In the ever power-conscious handheld world, PCA has a function called dynamic voltage management, which revs the processor up when needed and idles it when peak performance is not important. Intel is planning to put the whole package onto a single chip sometime in the future.
“DSP technology is definitely branching out from the modem side into the application side, providing key advantages in applications like videoconferencing and video streaming,”
Stephan Bork, Texas Instruments
Some competitors take Intel's promises with a grain of salt. "While Intel has something in development...TI already has an integrated piece of silicon that is shipping in volume today that integrates an application processor and a modem on a single piece of silicon," says Bork, referring to Texas Instruments' OMAP architecture for 3G cell phones.
And other companies, such as Motorola, which is now offering complete chipsets and reference designs to cell-phone makers, warn that Intel doesn't have the requisite experience to serve the wireless market. "Today, we are the only wireless semiconductor supplier that has wireless systems expertise," says Ed Valdez, director of marketing for Motorola's Wireless Communications Division. "No one else can say that. Not Intel, not TI, not Infineon."
But Intel has played at the periphery of the wireless market for a long time, as the biggest single supplier of flash memory to cell phones. In fact, more than half the world's cell phones have Intel flash inside, estimates Vishwas Deshmane, marketing manager for Intel's Wireless Communications and Computing Group.
Intel wants to enable an "ecosystem" of hardware and software developers to design products and programs for wireless products, Deshmane says. The company is encouraging programmers that today write applications for its Pentium chip to port them to its PCA. So in the future, a trimmed-down version of the email and spreadsheet programs you now use on your computer at work could be coming to a cell phone or PDA near you.
"All of a sudden, these devices can be really productive tools for you and me," Deshmane says. "So you don't have to lug your laptop around all the time."
Shake it
With all the different companies competing for space in the same portable products, a shakeout is inevitable, according to Strauss. Only two or maybe three companies have the manufacturing firepower to win the battle to become the heart of the cell phone of the future, or whatever kind of hybrid portable device takes its place. They are TI, Intel, and maybe Motorola, Strauss says.
"Intel is going to be one of the survivors," he says. "Intel knows we are going to be shipping a billion units in 2006. There are only two or three companies in the world that can meet those shipments, unless [the giant Taiwanese chipmaker-for-hire] TSMC changes its foundry status and decides it wants to be in the 3G business."
But there will still be room for more than a couple of major silicon suppliers at the periphery of the market, Bier wagers. "It is this big ecosystem with lots of niches," he says. "It is not as if you either have birds or you have mammals, and one wins. In our culture we try to boil everything down to winners and losers, but it is more complicated than that. You are going to have different kind of organisms thriving."
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