Talking about creative ideas, here is a third idea of the day: A hardware add-on that can be plugged into an IAD (through an Ethernet port) serving as a base station for a DECT phone. That is what I thought SiTel had announced recently. However SiTel is a chip company and I should have known better. The Netherlands based company announced a DECT chip that can be placed in existing IAD applications with telephone connections.

Modem manufacturers have been shipping IADs and cable modems with DECT base stations for quite some time now. Thomson has shipped more than 1 million DSL+DECT to BT for its residential VoIP offering. Starting later this year, BT will be sourcing its DECT enabled IAD from a Germany based vendor in addition. The Germany based vendor uses SiTel chip. SiTel expects about a million of their DECT VoIP chips to be integrated inside IADs by the end of this year. Majority of these IADs will land inside residential customers in Germany.

Continue reading "DECT could win over WiFi for in-house wireless VoIP" »

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, Alpha and Xinwei the announced ones. It partnered with L&T Infotech, India for development support.

Broadlight’s 3Q 2007 revenues were at estimated $15.5 million. Asia fetched around 70-75% of its revenues. Although revenues increased compared to the last quarter, but it was not enough to maintain its position within the Optical networking chip vendors. This quarter Broadlight skipped to 3rd position with Teknovus moving ahead of it.

Broadlight’s slipping down is evident as EPON is still preferred PON and we don’t see much of GPON happening which is the area of Broadlight.

During the period it closed $12 million series E funding round led by Benchmark Capital. It did sign up a few customers, although none is announced. It also opened an office in Taipei, Taiwan to provide sales and support services for manufacturers in the country.

Quarterly revenues for Teknovus were estimated at $16.1 million. With this Broadlight was pushed back by one position and Teknovus stood 2nd in the Optical Networking Chip Market for the quarter. The company also managed to secure $28 million in equity financing. Investments came from Lightspeed Venture Partners and Galleon Crossover Fund.

Revenues continued to come from the existing customer base of Mitsubishi, Fujitsu and Samsung. However, no major deployment was announced this quarter. Although this quarter Telekom Malaysia R&D selected Teknovus for their WDM PON system under Photonic Research Program.

Majority of the revenues continued to come from the APAC which as per our estimate is 80%.

Estimated revenues for 3Q 2007 were $939.6 million up by around 5.8% compared to last quarter. The units of chips shipped during the same period were around 21.5 million for various segments like 802.11x, Bluetooth and broadband. Broadcom contributed around 10% of the quarterly revenues for communications chip market.

Major chunk of revenues during the quarter were from sales of 802.11x and Bluetooth chips which fetched the company about 27% of the revenues. Broadband followed with 23%. Other segments that saw significant revenue contribution were VOIP 20% and Cellular 13%.

Broadcom made some strategic alliances this quarter that will enhance its revenues and stake in cellular market. First of all it was selected by Nokia for supplying single-chip cellular baseband processor for EDGE mobiles. Broadcom also joined the S60 community that gives it access to software, technology and S60 ecosystem resources for developing advanced smartphones based on S60 software which is developed by Nokia. It also joined the LiMo foundation that works on Linux OS for mobiles. Product wise it launched single-chip GPS solution for mobile applications. With all these developments we should see Broadcom aggressively re-positioning in the cellular market.

Continue reading "Broadcom 3Q07 Update" »

Q3 2007 revenues for SiGe were up 32% compared to same period last year. WLAN power amplifiers and RF front-end modules constituted major chunk and contributed about 70% of company revenues.

Geographically, Asia brought in the maximum business for the company. To cater to the growing Asian market, the company expanded operations into this region by relocating to the Hong Kong Science and Technology Park.

During the period SiGe announced several product development plans. For WiMAX it announced plans to deliver a series of RF front-end modules. The SE2593A is a 2.4GHz and 5GHz WLAN MIMO RF solution while SE2537L and SE2581L power amplifiers are the building blocks for WiFi implementations in client access applications like Laptops, etc.

Some of the significant customers at the end of the quarter were Apple, Broadcom, Conexant, CSR, Dell, HP, Linksys, Netgear, Nintendo and Samsung.

Does the market have a workable business plan for leveraging femtocell topology for WiMAX?

I believe we do. If you look at Sprint WiMAX plans they are putting femtocells in McDonalds and various such places. It is definitely part of other service provider plans as well, such as in Korea. These service providers realize that having just the macro cell infrastructure is not enough for WiMAX.

Do you see CPE vendors working right now on integrating Mobile WiMAX with the existing residential gateways so that it could be affordable to a certain extent?

Absolutely. Most of the CPE guys are on it. WiMAX started initially with fixed nomadic deployments which is really CPE based. On the CPE side you have many types of devices which are either just for data or the residential gateway. Many of them, particularly ODMs in Taiwan like Quanta, Alpha, Gemtech, etc. have some kind of residential gateways for this.

Right now how mobile and fixed WiMAX end users do you see?

If I talk about pure WiMAX it’s around half a million subscribers.

What sort of subscriber forecasts are you working around?

Take Sprint again as an example. Sprint will cover 100m users mid next year. Let us say they have 10% penetration. That means about 10 million subscribers that you can reach in North America quite quickly. This is all a question of timing more than a question of technology. Within our plan we see around 30 million subscribers by 2010 which is not very aggressive in reality.

Continue reading "Interview with Dr. Georges Karam, CEO, Sequans" »

Texas Instruments led the Communications Chip Market in 3Q 2007 with revenues of $3.66 billion up sequentially by 7% q-o-q. Of these around 47% were the hardcore silicon sales revenues which amounted to $1.73 billion.

Segment wise, Broadband contributed the maximum of revenues with around 35% coming from it. Cellular contributed 28% of revenues. Generic Networking chips fetched in around 19% while 802.11x technologies share of revenues was around 10%. VoIP contributed near 8%.

For the quarter the overall estimated shipments for the company were around 131.1 million which was 16% of the entire chips consumed by the communication market during the period.

Continue reading "Texas Instruments 3Q07 Update" »

Q3’07 revenues for Conexant were $183.9 million, up by 2.4% q-o-q. This includes one time royalty of around $4 million related to an existing license agreement. Segment revenue shares remained same as 2Q07, with Imaging and PC Media contributing 40%, Broadband Access 30%, Broadband Media processor 25% and the Embedded Wireless Network 5%.

Majority of the shipments were seen in DSL and SD STB in the communications segment. As of this quarter the total DSL port shipments were around 250,000.

Around 89% of the quarter’s revenues came from Asia-Pacific region. Americas contributed around 6% and the EMEA revenues were 5%.

Continue reading "Conexant 3Q07 Update" »

Lattice Semiconductors had revenues of $58.3 million, down by 2% q-o-q. The communication chip product line however saw an increase in revenues by 2% to $31.5 million. According to Lattice, China and Japan saw an upward trend during 3Q07. Wireless infrastructure equipment and set top boxes manufacturers saw growth. However, there was some weakness from the wireline side.

By product family the FPGA revenues were around 23% while PLD contributed the rest of 77%. During the quarter around 14% ($8.2 million) of the revenues was generated by new products launched. Mainstream product revenues constituted 53% while another 33% came from mature products. New product revenues continue to grow and this quarter it was up by 28%.

Geographically Asia was the major contributor of revenues with around 59% of the revenues coming from this region. Americas contributed around 21% and the rest 20% came from the EMEA. Of these revenues 66% came directly while distributors got in the rest 34%.

Continue reading "Lattice Semiconductors 3Q07 Update" »

Communications Chip Market generated revenues of $9.4 billion in 3Q 2007 up by around 6% sequentially on Q-o-Q basis. The total shipments estimated during the period were 819 million chips. Shipments increased by about 1% q-o-q. Texas Instruments leads the market with estimated 18.5% market share. Other leaders for the quarter are Freescale, STMicrosystems, Broadcom and Qualcomm. Together the top 5 leaders had around 58% of the market share during 3Q07.

Continue reading "Communications chip market generates $9.4 billion during 3Q07" »

General Networking chip market generated estimated revenues of $3,097 million for the quarter 3Q07. Chips shipped for the same period were estimated at 477.2 million units.

Texas Instruments maintained lead in this segment with around 11% of the total share. NXP was the second largest player with share of around 10%. Other significant players are Freescale, STMicrosystems and Maxim IC.

In comparison to 2Q 2007, all the top 5 players saw some sequential decline in their revenues as well as in the number of units shipped. The possible reason for this could be the uptake in the usage of special purpose chips rather than the usage of generic networking chip.

General Networking chip segment is the largest revenue contributor in communications chip market.

Chips intended for broadband technologies generated estimated revenues of $2.2 billion during the quarter 3Q07. Broadband chip shipments for the same period were estimated at 119.23 million units.

Texas Instruments maintained lead in this segment with around 28% of the total share. ST Microsystems is the second largest player with 20% market share. Other significant players are Freescale, Broadcom and Infineon.

CPE remained the major consumer of broadband chips. Average selling price in this segment continues to decline. This is reflected by the fact that while top vendors in this category have increased their unit shipments, the revenue increase is not proportionate.

For a chip vendor, maintaining leadership in the overall communications chip market is very much dependent on the leadership in this segment. Broadband and cellular are the two major segments in the telecoms market for chip vendors.

802.11x and Bluetooth chips generated an estimated $1.12 billion worldwide during 3Q07. Nearly 41.4 million chips in this category were shipped during the period. These chips were used for both core and CPE devices in various wireless technologies like WiFi, WiMAX, Bluetooth, Zigbee and WiBro. However, chip usage in core devices fetched more revenue compared to CPE where the usage was more in terms of units.

Compared to 2Q’07 results, the segment witnessed a q-o-q growth by about 4%. All the top 5 leaders in this segment improved their market share, although marginally. Unit wise they saw some proportionate increase. I am therefore inclined to assume that the average selling price in this segment did not see any significant fluctuations.

Broadcom leads the market maintaining 22% of the revenue share. Freescale, Texas Instruments, CSR and STMicrosystems followed that lead in that order. The top 5 vendors in this segment made up 73% of the total revenues for the period. Consumption-wise they supplied 71% of the total chips used.

Worldwide cellular chip market revenues for 3Q 2007 touched an estimated $2,063 million. An estimated 141 million chips were shipped during the quarter.

The market was led by Texas Instruments which took market share of around 24%. That lead was followed by Qualcomm, Freescale, Broadcom and STMicrosystems in that order. Together these five generated around 69% of the total revenues generated by cellular chip sales.

Compared to 2Q 2007, revenues and shipments for the cellular chip market were up by 8% q-o-q. Qualcomm was the only chip manufacturer which saw some increase in the revenue shares among the top 5 cellular chip vendors. Perhaps the reason behind this could be the decreasing average margins per chip in the GSM space, and that would not have affected Qualcomm with the vendor being into CDMA.

Cellular Chips 3Q07 section of the upcoming quarterly chip update tracks the shipment of chips that are mainly used in handsets and core network elements in cellular technologies that include GSM, CDMA, and 3G.

Metalink had revenues of $3.9 million for 3Q 2007. This was sequentially up by 56% compared to 2Q 2007. All the revenues came from xDSL chips except the $200,000 generated from production sales of WLANPlus chipsets. This was the first quarter which saw the first WLANPlus production shipment. These were shipped to an ODM. The net loss during the period registered was $5.2 million.

Europe and Israel contributed around 57% of the entire quarter revenues while North America brought in around 35%. Asia contributed 8% of the revenues. The 10% customers for the quarter were ECI and ADC.

The Video over 802.11n market started getting traction with some manufacturers in Europe, NAM and Asia starting off volume production of STBs. Another achievement on this side is that some of the TV makers in Japan have started working with Metalink to develop integrated 802.11n Digital TVs. These two items are expected to generate significant volume deployments for Metalink’s 802.11n chipset.

Continue reading "Metalink 3Q07 Update" »

PMC-Sierra’s revenues for the quarter were $117.5 up by over 12% compared to Q2. Of the total revenue Optical chips contributed the main chunk with estimated revenues of $85 million which it generated by shipping over 3.62 million such chips in the quarter. Optical chip constituted around 72% of the revenues.

Revenues for the period saw improvement due to activities in wireline business. FTTH and MIPS related micro processor business showed a slight decline this quarter. The other business, enterprise storage, also improved during the quarter.

By region, Asia contributed 67% of the business followed by North America with 20% of the business. Europe brought in 10% of the business.

Continue reading "PMC-Sierra 3Q07 Update" »

Revenues for the 3Q 2007 touched $2.7 billion up by around $400 million compared to 2Q 2007. Total shipments for the period were 2.2 million units (all 8” wafers now). Shipments for the quarter were up by around 20%. 66% of the quarter’s production was consumed by fabless/system customers while IDMs consumed the remaining 34%.

Geographically North America accounted for majority of the sales: 74%. Asia followed in sales with 13% of total. Europe accounted for 10% of the sales. Japan contributed 3% of the sales.

Communications segment continues to be major sales contributor segment for TSMC. In 3Q 2007, around 42% of the sales came from this segment. Other segments contributing to the quarter revenues were Computer 32%, Consumer 17%, Memory 5% and others 4%.

Continue reading "TSMC 3Q07 Update" »

Optical Networking chips generated an estimated $264.5 million during 3Q 2007. That represents growth of about 6% q-o-q. PMC-Sierra led with market share of just under 32% which is roughly the same share as in last quarter.

Top 5 vendors in optical networking chip market - PMC-Sierra, Teknovus, Broadlight, Ikanos and Conexant accounted for an estimated 53% of the total revenues during the quarter, which again is somewhat similar to their combined share in 2Q07.

Unit wise the top 5 vendors supplied 57% of the total consumption during the quarter.

Since optical networking deployments of carriers have not yet translated into a mass end-user service, the chipset contribution on CPE side is just around 20%. The rest comes from the chips consumed in core optical networking devices.

China has a huge number of ODMs/OEMs. But none are able to beat the Taiwanese vendors at the game. One major factor in selecting location for outsourcing of chip manufacturing is the proximity to the country/region of consumption i.e. ODMs/OEMs which will ultimately integrate these chips inside various devices. That logic tells us that China should have attracted more chip foundry business and it should have been the likes of SMIC rather than TSMC and UMC leading the market.

TSMC’s 3Q07 revenues touched $2.75 billion while SMIC managed $391 million during the same period. Both chip foundries are among the top 5 in the world.

One explanation that can be offered is the fact that Taiwanese chip foundry business has been in place for over two decades now. In comparison major Chinese chip foundries like SMIC are only about seven years old. Chinese foundries are not fully equipped or don’t have the requisite capacity to serve growing chip markets like Nano Chips which are widely used in communications. If the foundries of the two countries are compared, technology wise there is a gap of around three years, according to the Taiwanese vendors, which is quite substantial.

However I would conclude this post by saying that chip foundries in China are strategically better positioned to serve the large number of domestic ODMs/OEMs there. They are better positioned to buffer and offset the pressures of price declines in chip market.

Revenues in the 3Q07 were $4.3 million. In terms of units of chips sold, this quarter saw the highest number in 2007 with estimated shipments of around 160,000. Of these, around 16,000 chips were for base stations for Fixed and Mobile WiMAX while the remaining 144,000 chips went into subscriber stations. The total number of chips shipped for Fixed WiMAX were estimated at 135,000 while around 25,000 chips were for Mobile WiMAX during the quarter.

The total number of customers at the end of the quarter is 26 but the company did sign up many existing customers for other solutions mainly for the Mobile WiMAX chips. During the quarter WiNetworks launched WiN7000 compact Base Station using SQN2130 Mobile WiMAX Base Station ASIC. Telsima India also chose Sequans chips for StarMAX product line. It ordered around 100,000 chips for subscriber station and another 10,000 for base stations to deploy WiMAX with Tier I operators in India. Other selections were by Alvarion for mobile WiMAX chips for Pico Base Stations and SOMA Networks selecting SQN2130 base chip for FlexMAX mobile WiMAX system.

Continue reading "Sequans 3Q07 Update" »

Your company is almost 30 years old. What has been your experience as an entrepreneur? Often times, it is not the pioneers who become billionaires? Do you have any advice for the new entrepreneurs in the area of semiconductors?

I have enjoyed being entrepreneur. I enjoy being a pioneer and have separated being a billionaire from the equation. I think that being a billionaire would significantly destroy my pursuit of happiness. Before I started WDC I asked Glen, founder of ICE, one of my mentors: “What is it all about?” He responded immediately without hesitation: “It is doing what you like doing.” I have always loved and have been passionate about what I do.

So where is the value in entrepreneurship then? Satisfaction?

Well, knowing that my microprocessors have benefited many in early PCs, were used in billions of communication system modems, brought joy to some in entertaining game systems, help support life on a daily basis (pacemakers and defibrillators) gives me an uncommon satisfaction. So my advice would be to pass along Glen’s advice he gave me. I would probably add, “If you become a billionaire I hope that doesn’t diminish your happiness and consider giving your fortune to good causes.”

Continue reading "Interview with William D. Mensch, Chairman & CEO, Western Design Center" »

Texas Instruments, Freescale, STMicroelectroncis, Broadcom and Qualcomm are the top 5 communication chip makers. And there are certain common ingredients in all of them.

1. They all cater to CPEs and end points. Since the cost per chip and the sheer volume of end user end-points is huge, that means better margins and bigger sales.

2. Majority of their chip product portfolio addresses broadband and/or wireless technologies. And both these markets are witnessing tremendous growth.

3. Third factor that makes these companies leaders is that they are able to offer solutions across the whole spectrum of higher end and lower end products. So they are not willing to let any opportunity slip away.

4. All these vendors spend at an average 15-20% of their revenues on R&D. Investing in R&D is the only way forward for maintaining differentiation.

You took around $60 million in funding within a span of just 6 months? What do you plan to do with it?

We have actually taken $50 million since 2002. Our first VC funding came in 2004. The second round of it came in November of 2006, and that was $32 million. The current round of financing takes us through the 3rd quarter of 2008. That is when we will be shipping in volume and selling into PCs and digital cameras onwards to cell phones.

When should we be able to see this technology in our cellular handsets?

We have talked to and are working with several manufacturers. However, I cannot announce anything more on this right now. But one of the companies we are working with is among top 5 cellular manufacturers and we expect the handsets with the upcoming high-speed Bluetooth standard out in 2009-2010.

Continue reading "Interview with Colin Macnab, CEO, Artimi" »

During the last quarter, estimated $8.8 billion worth of revenue was generated from chips consumed in various communications equipment including Broadband, VoIP, Optical Networking, Mobiles and 802.11x technologies. In terms of volume around 812 million units of semiconductor materials (ICs, SoCs, ASSPs, etc) were shipped.

Texas Instruments leads the market with earnings of around $1.63 billion during 2Q07 which represents about 18.5% share of the total market. Other leaders in the communication chips market include Freescale, ST Microelectronics, Broadcom and Qualcomm.

Continue reading "Communications chip revenue touched $8.8 billion last quarter" »

Worldwide broadband chip market hit $2 billion revenue mark for the quarter 2Q07. Broadband chip shipments for the same period were estimated at 111.44 million units.

Texas Instruments continues to maintain lead in this segment with around 28% of the total share. ST Micro is the second largest player holding around 20% market share. Other significant players are Freescale, Broadcom and Infineon.

Continue reading " Broadband chip market 2Q07 update" »

VoIP chips generated revenues of $653 million during 2Q07 with shipments touching 27 million units. These shipments include baseband chips used for various VoIP equipments on core and CPE side, as well as silicon which incorporates VoIP capability as a secondary functionality.

Broadcom leads the market. CPE chip vendors are leading the market in general owing to large volume shipments. Although average selling prices of chips are declining, volumes of CPE being shipped each quarter offsets the reducing prices. Broadcom has a revenue share of around 27%. Texas Instrument follows the market with around 20% of the share.

Continue reading "VoIP chip market 2Q07 update" »

Notwithstanding the advantages related to chip outsourcing, there are numerous challenges. Quality of the chip delivered by the contract manufacturers remains the prime concern. Manufacturers offer virtual inspections and pre-production inspections to ensure quality remains no issue.

Another issue is reliability of the manufacturer even though in communications chips, over 50% of the production is carried out by large well known fabs. Other reasons that chip vendors highlight include the risk of their business models being easily replicated, cross cultural mix and flexibility. But these are largely concerns of startup fabless chip suppliers and/or of those who outsource to small manufacturers.

Our estimates suggest that manufacturing of about 74% of all communication chips are outsourced. The retail value of that is around $25 billion per annum. If we assume that the manufacturer gets about half of that, we are looking at a market size of $12.5 billion for chip outsourcing within communications industry alone.

TSMC, UMC, SMIC and Chartered Semiconductors are some of the leading manufacturers in communication chips and make up over 50% of the total outsourcing business. TSMC leads the market followed by UMC and SMIC in that order.

802.11x and Bluetooth chip market worldwide revenues during 2Q 2007 touched over a billion at $1,073 million. Nearly 39.75 million chips were shipped during the period. These chips were used for both core and CPE devices in various wireless technologies like WiFi, WiMAX, Bluetooth, Zigbee and WiBro. However, chip usage in core devices fetched more revenue compared to CPE where the usage was more in terms of units.

Broadcom leads the market with around 22% of revenue share. Freescale, Texas Instruments, CSR and STMicrosystems followed that lead in that order. The top 5 vendors in this segment made up 71% of the total revenues for the period. Consumption-wise they supplied 69% of the total chips used.

The chart above lists the factors that are driving outsourcing in communication chips industry. Out of the 14 that outsource, 7 of them ranked 'Focus' as the main factor. One would have thought that cost saving is the main factor. The sample size is small (21 responses) no doubt. But then the communications chip industry is not that large. cost saving justifies outsourcing as management can see quick results in their account statements. But to really make a strategic difference, chip vendors want to outsource mainly in order to concentrate on areas where they feel they are adding value.

If you believe that startups in chip are able to get in only through outsourcing you may think again. It has become inevitable to outsource chip manufacturing irrespective of how long the vendor has been in the business, or how big a vendor is.

I have just completed a short survey of about 21 chip makers worldwide. Out of the 21 I interacted with on the subject, 14 outsource. Out of those 14 vendors, 8 are established large chip makers. It is not just the upfront investment in manufacturing facility (which can cost up to $3 billion to set up, and), which outsourcing saves but there are many other factors. I will be sharing some info shortly.

How would you sum up the competition you face in UMTS and Femtocell areas?

In UMTS, there is competition on the big base-station level from Nokia, Ericsson, etc. But innovation comes from the smaller side of base stations. We are going from macro base stations to pico and femto base stations. This is where we can offer cost effective chip solution.

On the femtocell we don’t yet see competition. But I am pretty sure there will soon.be some: companies like ST, TI, ADI and others are all exploring this space.

What about competition in WiMAX area?

WiMAX is a new market and we entered WiMAX three years ago as one of the early entrants. It is more data centric market. Data centric market has traditionally been open to new comers like PicoChip. On the telecom side, change in suppliers is made reluctantly because there are many standard conformations, etc. WiMAX is a much open market and the smaller ones have jumped in. On the big base station for WiMAX it’s mainly TI and Xilinx.

It can also be complicated sometimes. Freescale is sometimes a competitor as well as partner for WiMAX. They have a way to implement PHY which is part of the base station we specialize upon and at the same time we use their processors. ADI competes with DSP but we use other components from them. You have some smaller companies in WiMAX which are focusing on terminal end but may provide solution for base station also.

Continue reading "Interview with Guillaume d'Eyssautier, CEO, PicoChip" »

Worldwide cellular chip market revenues for 2Q 2007 touched an estimated $1,910 million. An estimated 130.6 million chips were shipped during the quarter.

The market was led by Texas Instruments which had a share of around 24.2%. That lead was followed by Qualcomm, Freescale, Broadcom and STMicrosystems in that order. Together these five generated around 68.8% of the total revenues generated by cellular chip sales.

Cellular chips 2Q07 update tracks the shipment of chips that are mainly used in handsets and core network elements in cellular technologies that include GSM, CDMA, and 3G.

Revenue for Sequans in 2Q'07 was in the range of $4-5 million. The company crossed a total of 25 customers in this quarter. This excludes the design wins.

Unit wise, it shipped around 63,000 chips for base stations and client devices. Majority of them were for client side. These chips were both for IEEE 802.16-2004(d) and IEEE 802.16e.

Continue reading "Sequans 2Q07 update" »

What changes have you seen in the customer demands related to chip features over the last couple of years and what is CEVA doing to address those demands?

With the triple play and quadruple play, there will be demand to significantly reduce the cost of these offerings, and the only way to accomplish this (in the context of chips) is to start integrating everything into a single chip solution. And the licensing model is the only way to achieve such advanced technology in a cost-effective manner.

Companies like TI, Freescale, ST and Broadcom cannot specialize in every one of these areas. They may be experts in the modem function of the fiber or in the modem function of DSL or WiMAX. But to have the in-house expertise in every technology required for triple or quadruple play products is very difficult. It is much easier for them to license a full solution for a block of the technology such as VoIP and integrate it into the chip. This is where CEVA comes into the picture.

Continue reading "Interview with Gideon Wertheizer, CEO, CEVA" »

• Company revenues for 2Q’07 were $59.2 million, up by 2% compared to previous quarter. Communications Chip revenue was around $30 million

• Device wise revenues were FPGA $13.5 million and PLD $45.7 million. FPGA showed an increase of 14% in revenues this quarter

• Experienced a rebound in orders from major customer accounts. Quarterly revenues from top 15 accounts grew 21%

Continue reading "Lattice Semiconductor 2Q07 update" »

VoIP silicon maker Octasic had a great quarter with revenues up by 50% compared to 1Q'07. Octasic had estimated revenues in the range of $6-8 million in the quarter.

Asia-Pac generated around 55% of the company’s revenues. China alone contributed around 50% of total revenues. US generated 40% of Octasic 2Q'07 revenues and EMEA accounted for just 5%.

Continue reading "Octasic 2Q07 update" »

Optical Networking chips generated an estimated $250 million during 2Q 2007. PMC-Sierra took about 32% of the pie. Top 5 vendors in optical networking chip market - PMC-Sierra, Broadlight, Teknovus, Ikanos and Conexant accounted for an estimated 53% of the total revenues.

Unit wise they contributed nearly 57% of the total consumption during the quarter.

Continue reading "Optical Networking chips market worth $250 million in 2Q07" »

Our upcoming quarterly update on communication chips reveals that EPON is selling much more than GPON. Apparently GPON is not so hip among the carriers. EPON is integration of Ethernet with PON and carriers are already familiar with Ethernet. On the other hand, GPON solutions are much more costly than EPON and this is going to remain so for a while.

Continue reading "EPON works just fine" »

austriamicrosystems AG is working on the separation of audio from baseband in mobile phones. The idea is to have a separate SoC which would address power management and audio requirements of a mobile phone to make it at par with MP3 player.

The current technology of using baseband for audio requirements won't work efficiently in the long run as there will always be the power consumption issue and quality will also be poor.

Continue reading "Mobile music to get separate power" »

Communications Chip maker Ikanos earned a quarterly revenue of $25.7 million, up by just 4.47% compared to 1Q'07. The major causes for a relatively flatter revenues were all external: correction in inventory by carriers in Japan, product transition by Korean carriers and lower volume sales of ADSL modems in Europe. Ikanos's major portion revenue (almost 86%) comes from these countries and regions.

Of Ikanos product mix, revenues from chips going into Access equipment were around $13.88 million (54%) and the remaining 46% ($11.82 million) came from the Gateway market.

Continue reading "Ikanos 2Q07 update" »

2Q'07 was a strong quarter for Teknovus particularly for EPON chips. The company revenues for this quarter were in the range of $10-15 million - obviously all of them coming from the Optical Networking chips.

Some of the prominent customers that contributed to 2Q07 revenues were Mitsubishi, Suminet, Salira, Ocean Broadband, Furukawa, Fujitsu and Samsung. This quarter Teknovus announced deployment for Chunghwa Telecom and China Telecom. Japan and Korea have started to deploy EPON and China continues to grow steadily.

Continue reading "Teknovus 2Q07 update" »

If Infineon is taken over by ST Micro, it would restructure the Communications Chip industry a great deal. STMicroelectronics holds about 11% of the communications chip business and with Infineon strength behind it, the combined entity share would be in the range of 15-16%. This would make it the second largest chip maker for communications after Texas Instruments and the difference between the two would be in the range of 3-4% share.

The buy out will not significantly enhance, however, the portfolio for ST Micro other than it bringing in Qimonda's RAM business. ST is into Flash memories mainly.

Continue reading "If ST Micro buys Infineon" »

Q2’07 group revenues for Infineon were $2.36 billion. Excluding Qimonda, the revenues were $1.36 billion for the quarter. Compared to last quarter the revenues were down 11%. However less Qimonda, there was an increase of 3%. Segment wise, Automotive, Industria and Multimarket brought in $.102 billion, Communication revenues were around $350 million and other Operating Segment revenues were $72.97 million for the quarter. Qimonda had revenue of near a billion at $999.78 million.

Communications chip contributed around 25.73% of Infineon revenues during Q2’07. There was an increase in revenues for this segment by about 10% on quarter basis. These included revenues of around $13.51 million that rose out of sales to Qimonda itself. No single customer contributed to 10% of revenues for the quarter.

Continue reading "Infineon 2Q07 Update" »

• The overall revenues for 2Q’07 were around $75 million, of which around 100% came from IC sales. Compared to 1Q’07 there was net increase of 2% in the revenues realized.

• Around 90% of the revenues came from non-US customers.

• There was no customer making 10% of sales.

• Around 30 customers contributed half of the revenues.

• Regarding distribution, direct and channels sales contributed equal amount of revenues for this quarter.

Continue reading "Silicon Labs 2Q07 update" »

• Conexant Q2’07 revenues were $179.5 million, down by 10.2% compared to Q1'07.
• Imaging and PC Media contributed 40%, Broadband Access 30%, Broadband Media processor 25% and the remaining 5% came from Embedded Wireless Network.
• The primary cause of decrease in revenues was due to some specific and generic changes in Broadband Media Processing segment. There was discontinuation of cable STB product program by a major customer. Besides, there was around 22% decrease in average selling prices and an 8% decrease in unit volume shipments.

Continue reading "Conexant 2Q07 update" »

Asia Pacific is the largest chip manufacturing region in the world. With over 80% of manufacturing outsourced to Taiwan, China, Singapore, South Korea, Malaysia and Japan, can India make a share out of pie?

Post globalization China and India have become the hot favorites across industries for outsourcing of non-core activities. Even some of the core activities have been outsourced to these countries and together these two countries have attracted around $100 billion of FDI in the year 2006 with 85% of this taken by China alone.

Continue reading "Chip manufacturing in India can bank on the software expertise" »

An estimated $1.25 billion worth of semiconductor devices will be used in Video Surveillance and Security market during the year 2007. These devices include chips, sensors and other such devices that go into various components of Video Surveillance solutions including Cameras and DVRs. Cameras will consume an expected $849 million worth of chips while other elements will consume about $401 million worth of chips during the year 2007.

With the theme results I have, it looks that 2010 will be the first year when major shift from analog to IP will happen for cameras in the video surveillance market.

Continue reading "2010 to be the swing year for video surveillance cameras" »

I just listened to some of the webcasts of latest earnings calls of various chip vendors like Zarlink, Conexant, Xilinx, etc. Whenever a question regarding their main strength or differentiation is put, the reply revolves around being able to offer software for the chip. This is what most chip vendors mention, to the extent that it no longer seems a differentiation.

In fact it is essential for chip vendors to have software facility. Otherwise, how can they add value to a chip? In today's outsourcing scenario, how can one claim that it has something better to offer when the manufacturer for a multiple of them could be the same company in Taiwan or China.

Fabless vendors have nothing tangible to retain their customers with, other than agreements and licenses which have an expiry. So having software becomes a necessity that actually raises the barriers to exit for their customers.

Out of the expected 30 million units of video surveillance cameras to be shipped in 2007, a very small (but growing) number of 60,000-75,000 among them are expected to be Mega Pixel cameras, according to Pixim. That amounts to about 0.2 -0.25% of the total expected shipments.

Nothing major is expected in this area for at least 3-5 years till IP camera installations get a real kick. I am not actually convinced that IP camera installation and mega pixel camera trend are correlated so much. But that is what some industry players think. However, to make use of the latest applications of video surveillance, such as video analytics, the capturing devices will have be improved.

If we go through a typical supply chain in communications chip industry we have Intellectual Property (IP) developers, Reference Designers (RD), chip manufacturers, and fabless chip vendors. In practice, IP developers and/or Reference Designers exercise little influence although they form the basis of a chip.

Fabless vendors in comm chip market are the ones that dominate the scene. They take the maximum chunk of revenues. Even the start ups here have been able to either break-even or are nearing break-even as their RoI is high. Obviously by outsourcing things, they are able to allocate more resources toward R&D and understanding customer needs.

On the other hand the royalties that make the basis of revenues of IP sellers are still in the range of 15% - 45% of the total revenues. And if the customers are not shipping the new chips yet, these companies do not see any immediate revenue realization for their work.

A follow up to my post yesterday ….

Single mode voice enabled WiFi chip makers like Conexant and CSR have their versions of dual mode handset chips. And so have others. Not many seem to admit that single mode VoWiFi is a declining application. Conexant sees both markets remaining intact.

It seems like the main markets for single mode VoWiFi will be the enterprise segment: enterprises with large campuses having mostly the On-Net calling requirements. Universities, Factories, Hospitals and Fire & Emergency departments are also the likely candidates. These entities all have either large campuses and/or their calling pattern is limited within the group of their colleagues, peers, etc.

Continue reading "Keeping single mode VoWiFi alive" »

Voice enabled WiFi or VoWiFi market has not been doing well for the last several quarters now. The reason we had heard in the past is the FMC. With the advent of FMC, single mode VoWiFi is being seen as addressing myopic opportunities.

The VoWiFi market could be of interest within two broad categories. One is the establishment of city wide WiFi network and the other would be under roofs whether in offices or at homes. But FMC is giving better alternative in both these areas and as a result there has been a considerable reduction in the revenues of chipset products for VoWiFi segment. iLocus 2007 VoIP annual report sees a reduction of about quarter of revenues on yoy basis.

Continue reading "Is single mode VoWiFi market facing extinction?" »

Click here to read Part 1 of the interview.

As a consumer, I can share one broadband connection on several home PCs. Why I am not allowed to share entertainment like that over TVs or other output devices?

Not sure if that is really the case. In the U.S., the consumer can get several STBs for multiple home connections. The satellite or cable TV provider is not charging two or three times per TV. They are charging an incremental amount though you do have to pay for the entire service.

Yes but when you share a broadband connection at home you do not pay incremental charges.

Yes, that is right. There is that difference.

What if the regulators allow multiple TV users within a home without incremental charges? How would that affect your business?

We are not really providing additional links to the WAN per se. What we are doing is allowing the distribution of content inside the home. So it is a totally different model than what you are thinking about.

Continue reading "Interview with Patrick Henry, CEO, Entropic (PART 2)" »

A little under 15 million ports of Power over Ethernet (PoE) equipment are being shipped a year. That number does not match the hype created a few years back. The issues seem to go beyond standards (IEEE 802.3af, IEEE 802.3at). The main problem is that network owners are concerned with speed of their networks right now rather than the utilization of that network. Utilization aspect has taken a back seat for a while. Another major problem is the orientation of PoE market. It is an application driven market.

PoE is used only in very specific applications where its benefits are really seen and tangible to the market … for instance VoIP. It is the largest driver of PoE. Vendors have been able to push their IP Phones with the help of PoEs. Similarly WiFi and WiMAX are the other areas where PoE is getting traction.

But vendors see plenty of opportunities ahead such as the ability to power laptops. Segment leader Microsemi which holds over two-thirds of the market shipping about 10 million ports in 2006 expects its shipments to grow 50% annually. According to Microsemi, 80% to 90% of ethernet switch ports should be using PoE in years to come.

Entropic, established in 2001, has been focused on Home Entertainment networking. It provides chipsets along with software in this segment. C-Link, its flagship product allows the sharing of multimedia content over COAX infrastructure. The company recently acquired RFIC providers RF Magic and Israel based Arabella Softwares.

Your market focus is home entertainment networking and broadband access. What changes have you witnessed in these markets over the past six years, and what have those changes meant for you as a chipset vendor?

The home networking space historically has centered around data and voice. We are seeing an emerging trend toward digital entertainment including streaming video. The vision of Entropic is to capitalize on this trend. The other trend we are capitalizing upon is the need for higher speed which out chipset facilitates.

c-LINK is your flagship product. Can you share with us its current market status in terms of shipments and other data?

Our growth has been spectacular. We have shipped cumulatively more than five million c.LINK chipsets.

Continue reading "Interview with Patrick Henry, CEO, Entropic (PART 1)" »

Texas Instruments is expecting to ship about 5 million video surveillance and security chip devices in 2007. These will mainly come from TI’s DaVinci product family. Video surveillance and security solutions have seen a boom since the 9/11 incident.

But the issue is that TI has higher end programmable DSPs on offer and these are mainly used in IP cameras, DVRs and other storage devices. Reaching 5 million figure this year seems an uphill task. Out of the total 15 million estimated cameras video surveillance cameras shipped per year, only about 2 million are IP cameras where TI solutions could go in. If TI estimate is to believed IP cameras market must see an exponential growth for the remaining months of 2007.

Continue reading "TI expects to sell 5 million video surveillance chips in 2007" »

I am carrying out a brief survey on Outsourcing of Communications Chip Manufacturing. It seems that more than half of the chip makers I have interacted with are either fully or partly outsourcing their manufacturing requirements. I am testing some of the main reasons why they outsource and also the main reasons for not outsourcing (if they do not outsource). The survey will be a short one. Hope to publish this paper within the next few days.

Here is the backgrounder to the topic: The trend of outsourcing of manufacturing communication chips has grown into a $25 billion market with about 74% of the total communication chips being manufactured through outsourcing to Fabs and Foundries across globe, mainly to Asia-Pac. About 50% of the outsourcing market is held by large chip manufacturing facilities like TSMC, UMC, SMIC and Chartered Semiconductors located mainly in Taiwan, China, Singapore and Korea.