Here is the annual list of honors from our recent chip report:

BEST MARGINS: Qualcomm enjoys the maximum margins among communications chip companies. It spends around 67.5 cents to earn $1 of revenues.

BEST COST CONTROL: Cavium Networks was able to decrease its total operating expenses by 22.34 cents per dollar last calendar year, which was 18.3% less compared to the previous year.

BIGGEST R&D SPEND: Ikanos spends around 47.5% of its revenues on Research and Development. That is an increase of 7.62% compared to previous year.

Continue reading "The best comm chipheads around" »

Revenues for the 1st quarter of 2008 were $177.1 million, down by 14% q-o-q. Net loss stood at $17.1 million for the period up from $13.4 million in the previous quarter.

Communications contributed about 39% of the total revenues (the second biggest contribution), an increase of 7% from the last quarter. Computing was the largest contributor of revenues which brought in 41% of the total quarterly revenues.

Continue reading "Integrated Device Technology 1Q08 Update" »

Atheros earned revenues of $114.5 million which was up by 0.2 million q-o-q. Net income for the period was $7.6 million. Taiwan amounted for the maximum sales with 52% of the total revenues coming from Taiwan while China contributed another 26%. US sales stood at just 1%. Asia continued to be the largest business region for Atheros with 94% of the total revenues from there. However comparing with Q1 of 2007, the sales from Asia have declined by 4%.
Hon Hai Precision Industry Co Ltd accounted for 17% of net revenues and was the only major customer for the period.

WLAN product adoption by retail and carrier customers of Atheros was the primary source for the quarterly revenues. Other areas that did well for Atheros include PAS, Ethernet and GPS chipsets. In terms of shipments GPS and WLAN chipsets grew in units shipped while PAS sales declined. Overall, comparing the shipments with those of Q1 2007, there was an increase of 58% in the number of chipsets shipped. Revenues did not grow proportionately due to decrease in average selling price of the chip.

Continue reading "Atheros 1Q08 Update" »

SMIC earned revenues of $362.37 million in 1Q 2008. Compared to 4Q 2007, there was a decrease of 8.3% in revenues. Net Loss was substantially high at $119.7 million which was just around $0.9 million in the previous quarter.

The fab shipped 454.3 million wafers (8”) which is 43.2 million less than the shipments of last quarter. The capacity utilization of the fab was at 92.1% in the quarter down by 2.3% q-o-q.

Communications continued to form the maximum share in sales at 54.3%. Last quarter it was 47.4%. Computer and Consumer segments contributed 12.8% and 25.9% respectively. Other segments contributed the remaining 7%.

Continue reading "SMIC 1Q08 Update" »

During 1Q08, Qualcom shipped 85 million MSM (mobile station modem) chipsets, which was 8% higher than the previous quarter. And at the same time shipment for their QCT products touched $1.62 billion which represented a growth of 29% y-o-y basis.

Qualcomm registered $2.61 billion revenue in 1Q08, which was 17 % up y-o-y basis. Net income for the quarter stood at $766 million, 6% increase y-o-y. Sales from 3G CDMA –based products was the main contribution to the revenue.

Segment wise, CDMA technologies fetched $1,620 million revenue while Wireless & Internet segment contributed $192 million towards revenue. Technology licensing fetched $794 million and the remaining $63 million was added by strategic initiatives segment during this quarter.

Geographically, South Korea was the main revenue contributor with revenue contribution of around 35%. China followed with another 22%. Japanese and US vendors contributed 16% and 10% respectively.

Continue reading "Qualcomm 1Q08 Update" »

Communication Solution segment generated $472 million, down 15% compared to the prior quarter and up 27 % year-over-year. Mobile phone business acquired from Texas Instruments resulted in increase in revenue y-o-y in this segment, during this quarter.

Infineon achieved a landmark in this quarter by integrating Wi-Fi on its mobile phone platform and by offering Voice-over-IP functionality for low-cost mobile phones.

Among its announcements during the quarter, Infineon announced its RF switches shipments that are manufactured in a CMOS-based process on silicon wafers. In the first quarter, for low cost mobile market, Infineon introduced X-GOLD113 and X-GOLD213 with advanced features like camera, mobile internet and audio-entertainment.

During the quarter, a Tier 1 handset company selected Infineon Technologies’s SMARTiUE+, single chip Receive-diversity transceiver IC with a standard DigRF V3.09 interface, for their HSxPA/ EDGE products. At the same time, it marketed low cost platform family in 65 nanometer as well as two new integrated and power-efficient members of its Mobile TV IC family.

Revenue for 1Q08 was $1.032 billion up by around 0.5% compared to last quarter and 14.5% increase y-o-y basis. Net Income for the quarter was $74.3 million. The company witnessed the strong demand for their wireless business, enterprise networking and broadband during this quarter.

Segment wise, sales of 802.11x and Bluetooth chips contributed 26% to the revenue. Broadband contributed 24%. Other segments that brought significant revenue contribution were -VoIP 20% and Cellular 13%.

Continue reading "Broadcom 1Q08 Update" »

Revenues for Q1 2008 were $125 million, which was up by just a percentile q-o-q. Net Loss during the period was $22 million which increased from the past quarter’s $5 million.

During the quarter the company saw strong demand for the FTTH in the communications segment. Other areas that showed growth included enterprise storage and laser printer products. Regionally Asia remained the main business hub for the quarter for PMC-Sierra.

PMC-Sierra also announced partnership with IBM for RAID technology for the development of 6 GBPS next generation enterprise server and storage systems. It also introduced 10G EPON reference designs for Optical Line Terminals (OLTs) and Optical Network Units (ONTs).

Q1 revenues were $18.3 million up by 13% q-o-q. Net income was $838k for the period. Enterprise and Datacenter continued to be the main contributor of sales with contribution of 68%. Remaining 32% was brought in by access service provider, and consumer broadband software services segments. Geographically Asia (mainly China, Japan and Taiwan) and Europe were significant business contributors for the company

For the quarter Cisco was the biggest customer of Cavium.

Continue reading "Cavium Networks 1Q08 Update" »

Altera reported $336 million revenue representing 4% increase q-o-q. New category products saw revenue growth of 14% sequentially in this quarter. These products constituted 40% of the total revenue in the first quarter. FPGA and CPLD products showed higher demand rates with revenues increasing by 6% each.

Communications segment grew by 4% while other segments remained flat. Within communications, Telecom showed a decline while wireless and networking grew in double digits.

Continue reading "Altera 1Q08 Update" »

The top 5 communications chip makers hold nearly 60% of the market share. The rest is shared by over 200 other chip vendors. Of the top 5 vendors, only Qualcomm has a specific market that it addresses. Others have a wide portfolio serving multiple areas. It seems plausible therefore to assume that only Qualcomm will have inherent capability to maintain its market position while other vendors will be facing stiff competition from the startups.

As the communications market gets fragmented into more specific applications the current market leaders would not have the bandwidth serving these specific markets. In such a scenario startups like Sequans, Artimi, etc. may have better prospects as they are just focused on specific technologies.

Continue reading "Comm chip companies need to invest in startups" »

Content wouldn’t be king without broadband. And broadband would be a waste without the content. It has now become a ‘virtuous’ cycle of one driving the other. There are now 162 million websites (one form of content) worldwide. That sort of content both sustains and requires a huge broadband services and equipment market.

Broadband technology related chips - whether used in core infrastructure or the CPE devices - generated $8.4 billion in 2007. There are other allied equipment segments also that have grown due to broadband. One segment that I can immediately identify is 802.11x market. We are seeing growth in WiFi equipment mainly to access broadband from devices like laptops, PDAs and mobiles.

For VoIP and IPTV type applications, broadband is a pre-requisite. It took years for telcos to bring broadband services to the market. While the bloggers like us may choose to endlessly blog about mobile and web 2.0, the fact remains that broadband is the single biggest telecom success story of the past 10 years.

The Communications Chip market - which we segment into Broadband, Cellular, 802.11x/Bluetooth, VoIP, Optical, and General Networking - generated estimated $36.6 billion in the year 2007. That revenue was generated by shipping an estimated 3.73 billion chips during the year. The analysis comes from our annual chip report, Global Communications Chip Market 2008, published today.

Texas Instruments leads the market earning around $6.6 billion and thus holding 18% of the communications chip market share. Other leaders in the market include Freescale, ST Microelectronics, Broadcom and Qualcomm. Collectively the top 5 chip vendors had revenues of about $21.3 billion which accounted for 58% of the market revenues.

Broadband and cellular chips were the major contributors of revenue to the overall Communications Chip market. Broadband contributed 22.6% of the total revenues while 21.7% were contributed by the chips consumed by cellular devices. Within our segmentation, Optical Networking chips contributed the least i.e. $1.4 billion of the total communications chip revenues for the year.

During the year, communications chip companies were focused on making their chips feature rich, striking a balance between size optimization and increasing power, and producing multifunctional chips while containing the costs. While the long term migration plans are yet to be ironed out several startups are taking the opportunity to serve the niches and alternatives.

TOC of the report can be accessed here.

If we study demand patterns for the type of chips in communications segment, one cannot draw definite conclusions. There is no clear cut leading chip type. We have availability of specific function chips which are developed over ASICs, ASSPs, DSPs, FPGAs, etc. But all types are doing business.

Maybe we see more DSPs being used in communications market but that is primarily because Texas Instruments, leader among the chip makers, is pushing the technology. If they decide to go for some other platform, say FPGAs, we should see FPGA usage growing.

Continue reading "Chip type seems really irrelevant" »

….. so that chip makers can get down to business. The communications industry as a whole is undergoing a shift – from existing to new technologies. Developers and equipment manufacturers are testing various flavors that sometimes compete with each other. WiMAX or LTE; Softswitch or IMS; WiFi or Femtocell; etc etc. And all the while chip vendors are wondering what the heck is going on.

The customers of these chip makers are not clear about which way they want to go. There are all sorts of evaluation going on but no decision yet. Chip makers in turn are not committing whole heartedly to a particular technology. They have to offer a bit of everything. They don’t want to cut a sorry figure if the market goes a different way than what they had bet on. But that approach is not easy either. Catering to numerous technologies and meeting the equipment vendors’ expectations in the process is very difficult.

Continue reading "Let the clarity prevail" »

Communications Chip market generated estimated revenues of $9.8 billion in 4Q07, up by around 5% sequentially on Q-o-Q basis. Total shipments estimated during the period were 854 million chips. Texas Instruments leads the market with estimated 17.1% market share. Other leaders for the quarter are Freescale, STMicrosystems, Broadcom and Qualcomm which – among the four of them - held around 58% of the market during 4Q07.

Broadband segment is the main contributor to the overall communication chip shipments. However during the quarter broadband chips contribution remained flat at around $2.2 billion which is 22.6% of the overall communications chip revenues for the quarter.

Continue reading "Communications Chip revenue up 5% Q-o-Q" »

TriQuint Semiconductor registered revenues of $128.5 million in Q407 that were sequentially up by 5%. The company saw a strong demand for its handset product which saw 14% increase in revenue, with 59% being contributed by 3G. Besides, Wireless LAN also demonstrated strong growth.

During this period TriQuint introduced 802.11n chip for WLAN applications. For the mobile data market, it launched “Quad Band/Tri Band” 3G solution product. The company also announced availability of a high-voltage gallium arsenide (GaAs) power amplifier transistors designed to increase the efficiency of 3G cellular base stations leading to energy savings.

Continue reading "TriQuint Semiconductor 4Q07 Update" »

Analog Devices posted $614 million revenue for the quarter which represented a decline of 1.5% q-o-q. Industrial market segment fetched about half of the revenues at 49% of the total. Communications was the second largest contributor with 23% followed by Consumer and Computer markets with 22% and 6% shares respectively.

Communication segment showed the maximum gain of 6% for the quarter. Other segments showed a decline except the industrial which grew marginally by 1%. The increase in communications revenues is attributed to wireless infrastructure applications uptake along with the Analog products used in mobile devices.

Continue reading "Analog Devices 4Q07 Update" »

Revenue posted by Cypress Semiconductor in 4Q was $431 million which represented a decline of 4% q-o-q. The main reasons for the decline was a decrease in Consumer and Computation Division (CCD) and Data Communication Division (DCD). However the Memory and Image Division (MIV) fetched 4% more revenues.

North America was the strongest market with 4% increase in revenues while Europe showed a modest growth of 1%. Asia reported 6% decrease with Japan however showing increase of 2% in revenue.

In the communication space West Bridge was the strongest product which alone fetched $5 million of the total revenues.

During this quarter it shipped 40 millionth CapSense system used in handsets. Cypress Semiconductors also announced programmable peripheral controller product Astoria.

Quarterly revenues for F5 Network were estimated at $154.2 million up 6 % compared to the last quarter. Geographically Americas represented 57% of revenue, EMEA 21% and APAC 22% of which Japan contributed half.

Among demands in their application delivery networking products, the company witnessed a strong growth in Europe, Middle East and Africa. Asia Pacific showed a decline in demand while America showed a modest rise.

F5’s core AND(application development network) was the main revenue generator which fetched in $139.4 million or 90% of total revenues. Besides other product segments, telecommunication accounted for 23% of revenues.

Continue reading "F5 Networks 4Q07 Update" »

Q4 revenues were $16.2 million up by 14% q-o-q. Net income for the period was $2 million. Enterprise and Datacenter segment fetched the most - 73% of the sales. Remaining 27% was brought in by access service provider, consumer broadband software services segments. Geographically China, Europe, Japan and Taiwan were significant business contributors for the company.

Cavium announced development of OCTEON Plus CN50XX MIPS64 embedded processor family which has a wide usage in the communications area for the devices like VoIP gateways, etc.

Continue reading "Cavium Networks 4Q07 Update" »

Revenues in Q4 stood at $395.3 million, up by 1% compared to last quarter. Of this, communications chip manufacturing share was estimated at about $197 million. The chips were mainly made for the 3G handsets for various vendors.

SMIC also curtailed the DRAM foundry services and by the end of the year had cut the shipments by 22%. With the result the revenue from DRAM business was just 16.7% in the quarter compared to 23.6% in the third quarter. However the non-DRAM business grew by 13.5% in the quarter.

The total number of new customers reached 77 in the fourth quarter.

Continue reading "SMIC 4Q07 Update" »

Atheros posted a revenue of $114.3 million in 4Q’07 which was up by 8% reported in the last quarter. Income for the period was $21.4 million. The networking chipsets fetched revenues of 52% while PC OEM got in 43% and the rest of 5% was brought in through consumer chipsets.

Major growth was seen in core wireless LAN segment, particularly the 11g solutions that contributed primarily to the overall growth in this quarter. Wireless LAN chipsets contribution by types was 11a/g (16%), 11g (67%) and 11n (17%) of the total wireless LAN revenues.

Hon Hai Precision Industry was the only 10% customer for the period.

By the end of the quarter, Atheros had shipped over 20 million Ethernet ports to around 20 different customers on a cumulative basis. In 2006 they had just 1 customer for this product line.

Continue reading "Atheros 4Q07 Update" »

Revenues for the 4Q 2007 touched $2.96 billion up by around $260 million compared to 3Q 2007. Total shipments for the period were 2.36 million units (all 8” wafers now). Shipments for the quarter were up by around 5.9%. In 3Q 2007, the revenues had increased by 17% and the shipments by 20% which in this quarter has considerably gone down to 5.5% and 5.9% respectively. 68% of the quarter’s production was consumed by fabless/system customers while IDMs consumed the remaining 32%.

Geographically North America accounted for majority of the sales: 79%. Asia followed with 11% of total. Europe accounted for 8% of the sales. Japan contributed 2% of the sales.

Communications segment continues to be major sales contributor segment for TSMC. In 4Q 2007, communications chip contribution remained flat at 42% of the sales. Other segments contributing to the quarterly revenues were Computer 35% (up 3%), Consumer 15% (down 2%), Memory 3% (down 2%) and others 5% (up 1%).

In terms of chip technology, 90nm chips were the maximum revenue contributors for the quarter by fetching 29% of the revenues. In the quarter TSMC also announced shipping of one-millionth 12” 90nm wafer in less than 5 years. That was followed closely by 0.15/0.18um chips contributing 27%. The 0.11/0.13um, 0.25/0.35um, 65nm and 0.50um+ contributed 20%, 10%, 10% and 4% in that order. By chip technology 90nm chips saw some increase while others had a dip or remained flatter.

Continue reading "TSMC 4Q07 Update" »

If you are a developer who is particular about the underlying chip for your application, your demands will by and large boil down to Processing power the chip has, the Space it occupies, and the Power it consumes.

You need the processing power and speed so that you are able to add on multiple applications which can perform various functions. But adding more applications result in two things. It demands more power consumption and since the base band will be capable of giving output in various forms and for many applications, there will be more and more peripherals added to it. So demanding more processing power effectively results in increase of power consumption and the size.

Continue reading "The PSP of communications chip" »

Revenues for the 4Q 2007 were $35.3 million, up 5% sequentially. Revenue from multiservice access VoIP processors increased by 13% forming 28% of the quarter’s revenues. High-performance analog products showed an increase of 4% totaling contribution of 30% to the revenues while WAN communications remained flat by contributing 42% towards the overall revenues.

Geographically, Asia-Pacific contributed half of the revenues while Americas earned 39% of the revenues. Europe contributed 11%. Cisco was the only 10% end customer.

Continue reading "Mindspeed 4Q07 Update" »

Quarterly revenue for IDT was $201.2 million which reflects a decline of 5% qoq. Communications related revenues were approximately 32% of the total revenues which has declined from 34% last quarter. Other segments’ revenue shares were Consumer 19%, and Computing 43%. The rest came from audio segment.

The company continued their engagements with base station manufacturers on the wireless infrastructure side who are working on IDT’s Pre-processing Switch for next generation wireless rollouts.

Continue reading "Integrated Device Technology 4Q07 Update" »

Revenues in Q4 were up by a modest 2% qoq which stood at $323 million. New category products saw revenues grow 9% sequentially in this quarter. In terms of product families, CPLDs declined by a percentile which are used in a number of communication devices. FPGAs however grew by 4%. Among the products Max II CPLDs registered record revenue in this quarter which was up by 8%.

Operating expenses were around 44% of the revenues. Of these $71 million were spent on R&D. Although operating expenses were cut by 3% the R&D spending went up by 6% reflecting better expense management on selling, management and other costs.

Communications segment was the strongest segment in the quarter. It grew by 4% while other segments were pretty flat. Telecom business was down but wireless and networking grew by double digits.

Continue reading "Altera 4Q07 Update" »

Net revenues for the quarter were $540 million up by 8.6% yoy. Sequentially it was up by 3.3%. Communications contributed around $102.6 million. Other segments that contributed include Computing 31%, Consumer 29% and industrial 21%.

The net realizable bookings across segments were at $476.4 million down by 9% due to seasonality, fire at a major customers’ factory and the macro economic concerns of certain customers.

Maxim announced a cut in the R&D budget resulting in $15 million annual benefit towards operating expenses. It reduced investments in RF Wireless and Telecom. In the RF Wireless it announced discontinuation of investing into low-margin handset RF transceivers and in the area of Telecom it has decided to defer additional R&D investments till it sees market acceptance of recently introduced products.

Continue reading "Maxim-IC 4Q07 Update" »

My predictions for 2008 ...

CPE focus for devices made for WiMAX and IPTV types of access. A multifunctional chip or SoC will probably be common for these types of network elements.

Nanometer technology will take off. We will be seeing chips developed around 65nm and 90nm for the communications elements. These chips will also be used mainly for CPE.

Pricing pressures will be significant due to increased market fragmentation and shrinking margins. Single chip solutions for ultra low cost handsets will be one of the fastest growth areas within chip segments

Chip companies will explore contextual-communication services/applications driven by the future Web 3.0 apps which for example could imply combination of GPS and georefrence optimization at chip level

Core network platforms will continue migration towards standard chips in order to reduce OPEX and consolidate data center operations. The collaborative nature of present internet services and open interfaces to share user info will catalyze the move towards standard chips

Quarterly revenues for STMicroelectronics were estimated at $979.1 million for communications segment which was a little over 38% of the total revenues of $2.6 billion for the period. Compared to last quarter it was reasonably up. The major contributor continued to be the Broadband segment which includes chips for IPTV, DSL etc. Revenues from this segment were around 44.7% of the communication revenues.

The generic chips contributed another 26.7% of the revenues for the segment while Cellular chips fetched around 11.3% of the revenues. 802.11x and Bluetooth technology chips contributed in volume revenues of nearly 9.4% while VoIP specific chips contributed the remaining 7.9%.

Continue reading "STMicroelectronics 3Q07 Update" »

Ikanos revenues of $27.3 million for 3Q 2007 represented a gain of over 6% compared to last quarter. Gateway equipment chips revenue accounted for 45% of total revenues, with the rest coming from access equipment chips. This quarter Ikanos witnessed solid demand from European and Japanese OEMs that resulted in 45% sequential access port growth during the quarter.

Asia-Pac was the main revenue contributor with revenue share of around 70%. Europe followed with another 18% while the rest came from other regions. Country wise Japan, France and Korea were the major contributors with respective contributions of 56%, 16% and 12% of the quarterly
revenues.

Continue reading "Ikanos 3Q07 Update" »

Revenues for 3Q 2007 for picoChip were $5 million which it claims was a significant jump compared to the last quarter. WiMAX generated the most about 60% of the total revenues. HSPA was the next revenue stream with around 30% of the revenues while others contributed the remaining 10%.

Geographically Asia contributed around half of the company’s business while Europe brought in 30% of the revenues. Rest 20% revenues came from the US.

During the quarter it announced WiMAX femtocell single-chip and Wave2 IO-MIMO supporting both uplink and downlink. It also add up a few customers