TI, PMC-Sierra snap up DSP firms in 3G cellular
techweb.com
Will Wade and Margaret Quan
SAN MATEO, CALIF. - Although the market
for high-bandwidth wireless telephony
technology is still years from wide-scale
deployment, chip vendors are starting to
maneuver for key positions now. A pair of
acquisitions last week drove home this point, as
both Texas Instruments Inc. and PMC-Sierra
Inc. snapped up smaller digital signal processor
vendors that focus on technologies key to
implementing a wireless broadband network.
TI, already on the acquisition path this
summer, announced it will buy Dot Wireless
Inc., a privately held developer of DSP chips for
third-generation (3G) wireless code-division
multiple-access technology, for $475 million in
stock. The move strengthens TI's position in
CDMA, already bolstered by its recent
purchases of analog-component maker
Burr-Brown Corp. (Tucson, Ariz.) and Santa
Rosa, Calif.-based wireless LAN provider
Alantro Communications Inc. (see story, page
51).
Also last week, PMC-Sierra announced the
acquisition of fabless DSP chip company
Datum Telegraphic in a stock transaction
valued at more than $122 million. This is
PMC-Sierra's third purchase this year of a
DSP supplier, boosting its presence in the
cellular basestation market. In January the
Burnaby, B.C., company picked up Toucan
Technology, an Irish firm focused on
telecommunications DSP chips. And just last
month the company acquired voice-processor
DSP vendor Malleable Technologies (San Jose,
Calif.).
Eye on future
Will Strauss, president of market research firm
Forward Concepts (Tempe, Ariz.), said both
Datum and Dot Wireless offer key technologies
for the 3G cellular telephone market, but
pointed out there is little expectation that
high-bandwidth wireless data services will ship
in volume for several years. "Right now there is
no international standard for 3G service, and
we do not expect to see any shipments in
volume until at least 2005," Strauss said. "What
these companies are doing now is jockeying for
position."
PMC-Sierra's deal for Datum (Vancouver,
B.C.) will garner a key technology that can
dramatically cut the costs of installing cellular
basestations. Glenn Bindley, vice president and
general manager for PMC's access products
division, said Datum has developed a
tech-nique that allows a DSP chip to distort a
data signal before it is fed through the power
amplifier and transmitted.
Current amplifiers distort these signals, which
limits the effective frequency range they can
utilize and thus limits bandwidth. The Datum
technique carefully distorts the signal earlier in
the process, so the amplifier-added distortion
has the effect of cleaning up the signal and
therefore increasing the usable frequency
range.
While this will not increase the total bandwidth
available from a basestation, it will require far
fewer systems to support the total bandwidth.
"This is the power amplifier equivalent of using
a pair of glasses, to distort the signal into
something that is more usable," said Bindley.
Datum currently has this technology working in
a lab setting, using FPGA chips. PMC-Sierra
expects to turn it into a single-chip product
that should sample later this year. Bindley
stressed that Datum has several patents already
for the concept, and that nobody else he knows
of in the market is even attempting to pursue
the idea.
While PMC-Sierra hopes to create a new
market, TI is focusing on establishing itself in
an existing space. The Dallas-based chip giant
said it will use the purchase of Dot Wireless
(San Diego) to create a CDMA technology
stronghold near its wireless customers and
other wireless technology expertise clustered
there, such as CDMA pioneer Qualcomm Inc.
It's about engineers
Dot Wireless' IS-95A/B and IS-2000 CDMA
chip sets, software and transceiver reference
designs, as well the CDMA engineering talent
available among its staff of 75 employees, could
give TI a leg up in the race to market with 3G
CDMA silicon. TI's Gilles Delfas-sy, vice
president and manager of worldwide
communications, said the acquisition was
largely about recruiting CDMA en-gineers,
who are hard to come by.
"There are only a few hundred engineers in that
domain, and these [Dot Wireless] guys include
some of the founders of Qualcomm," Delfassy
said. "It is one of the deepest pockets of CDMA
talent."
Asked about the value proposition of $475
million for 75 bodies, he called it a "bargain" it
if gives TI a faster time-to-market. "TI is in a
very strong cash position and is willing to do
whatever it takes to succeed in wireless," he
said.
Delfassy prom-ised that new products
developed by the combined companies will be
available in the first half of next year.
Both TI and PMC-Sierra clearly have an eye
on the emerging market for higher-bandwidth
cellular applications. Although there is no
international standard yet for the 3G market,
analyst Strauss said the consensus is that it is
almost certain to be some type of
spread-spectrum transmission. Spread
spectrum uses several frequencies bundled
together to allow more data to be transmitted.
Whatever format is used, all of the cellular
basestations need to use power amplifiers,
which are their single most expensive
component, according to Strauss.
Japan is leading the way in the 3G market, and
the Japanese vendors are expected to settle on
their own domestic standard this year. But
Strauss predicted that the United States and
Europe will be slow to follow suit. If that proves
the case, the TI and PMC-Sierra acquisitions
may not bear fruit for some time.
"Besides Japan, nobody is going to make
money in 3G in the United States or Europe
until about 2005," Strauss said.
eetimes.com
Copyright ® 2000 CMP Media Inc.
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Since when has Dot Wireless ever made a chip set. Help VLSI design one, yes, but make silicon, no. |
