Intel, Texas Instruments Renewing Rivalry with New Chips
Knight Ridder/Tribune (May 1, 2001)
Apr. 29--SANTA CLARA, Calif.--Texas Instruments Inc. may be the king of chips for cellular phones, but rival Intel Corp. thinks it has the Dallas company's number.
The only company that's managed to brand a piece of silicon -- "Intel Inside" -- is putting its considerable muscle behind chips that will deliver the Internet to the next-generation device of your choice.
The chips are digital signal processors and analog processors. Over the past four years, the special "real-time" properties of this silicon duo made mobile phones ubiquitous and propelled Dallas-based TI to the top of the market.
But with characteristic confidence -- some would say arrogance -- Intel is challenging TI's dominance.
"The incumbent [TI] has no advantage," Ron Smith, vice president of Intel's wireless communications and computing group, declared in a recent interview at the company's headquarters.
Beyond the braggadocio, it can be tough to compare the companies' chip-making chops.
But the contest is coming as communications technology advances.
Both chip giants are firing up their marketing machines to announce "design wins," a way of keeping score of whose chip has won the latest nod from an important equipment maker or software developer.
If projections for the wireless market are even close to some estimates, 1 billion hybridized phones-cum-personal digital assistants will be shipped in 2004, possibly earlier. With a current market share of 60 percent, TI is peddling fast to keep its lead.
"It's TI's game to lose," said Will Strauss, present of Forward Concepts Inc., a Tempe, Ariz. semiconductor research firm.
TI once dominated Intel's business: chips for personal computers. In 1980, TI ranked first in total sales of microchips, according to Dataquest, part of the Gartner Group research firm. Ten years later, TI had fallen to seventh place. Intel was first.
But Intel has been caught napping before, too.
In July 1996, Intel's Mr. Grove and Microsoft's Bill Gates shared the cover of Fortune magazine. In the story, the two brainstormed about the future of computing. Both stuck by the PC as the center of the universe.
Meanwhile, TI was quietly executing a plan to dominate a new era: wireless communications.
Even today, Mr. Strauss said, the two companies still carry some of their old baggage. "Intel generally trivializes the DSP and its role in wireless," he said, "and TI doesn't entirely understand the PC industry."
What about a phone that has some of the functions of a PC? That's what many are predicting consumers will want when they exchange their cell phones for next-generation units that can download video clips and carry data at faster rates.
When demand takes off, who will have the most chips to sell?
"Only a few chipmakers can ship in volumes approaching those numbers," Mr. Strauss said. "And with its planned new factories Intel aims to be one of them. A very big one."
Intel knows "big."
In the first-floor visitors' lobby of the Robert Noyce Building, it's hard to escape Intel's long, historical shadow.
This is the company that coined Moore's law, co-founder Gordon Moore's maxim that would lead consumers to expect a nonstop stream of faster, better and cheaper high-technology products.
Intel can also claim Robert Noyce, who is generally credited with inventing the integrated circuit around the same time as TI's Nobel Prize winner Jack Kilby. And few executives did more for a certain mental disorder than did Intel's
Andy Grove: "Only the paranoid survive."
The Intel corporate culture is notoriously competitive and demands discipline. Mr. Grove, chairman, keeps it that way. He required that his successor as CEO, Craig Barrett, keep a cubicle on the fifth floor that's no bigger than anyone else's.
While other chip companies cut capital spending and research budgets, Intel has declared that it will "spend" its way out of the downturn.
Analysts say Intel's foray into DSPs -- with a big assist from Analog Devices Inc., a worthy competitor of TI's -- is an obvious, if belated, acknowledgement that wireless devices -- not personal computers -- are center stage these days.
But Intel cedes nothing.
Intel's strategy is to use DSPs from Analog Devices and attach them to its Xscale chip, a follow on StrongARM, technology Intel inherited a few years ago with the acquisition of Digital Equipment Corp.'s semiconductor division.
The company unveiled Xscale in August last year as a piece of an overall device aimed at the mobile Internet.
Mr. Smith calls Intel's strategy "a paradigm shift" in the wireless world because it emphasizes computing and memory over communications capacity.
"We're at an obvious advantage in all these areas," he says.
Analysts say that Intel is in effect telling software developers to write applications for its Xscale and not worry about writing code for DSPs.
There is a sort of pecking order among software developers that Intel is trying to turn to its advantage, said Mr. Strauss, the semiconductor analyst.
Writing code for DSPs requires a degree in electrical engineering or applied mathematics, he said, while almost anyone can pick up a book and learn to program on an Intel chip.
"Most programmers have no idea what a DSP is," he said. "Intel has told programmers, `Don't worry about this weird DSP stuff. We'll take care of it. Go play with Xscale.'"
This is where TI smells blood.
Alain Mutricy, a general manager in TI's wireless business unit, said Intel is putting out the equivalent of propaganda. "They are just trying to confuse people," he said.
Programmers writing for TI and the next generation of mobile devices don't have to worry about DSPs either, the company says, unless they want to. TI has a stable of 50,000 software engineers who have written the code on existing DSPs for mobile phones.
What is more, TI says, high-speed, next-generation devices must support, or be compatible with, that first layer of signal code.
"If you're developing software for a new DSP, you have to start from scratch," said Jeff Wender, a spokesman for TI's wireless unit. "Who wants to do that?"
TI unveiled its next-generation product last fall and is already shipping samples. It's a system combining a regular chip, a DSP with memory and peripherals, such as flash memory. Intel's product combines its chip's computing power -- think regular chip, not DSP -- with signal processing crafted by Analog Devices.
But as TI points out, Intel has no track record in mobile devices, including personal digital assistants. While it has produced some Internet devices, including a stylish MP3 player, its new product isn't running in a Nokia phone or any other handset, for that matter.
Craig Mathias, an affiliate analyst with Mobile Insights, said the TI vs. Intel battle will be decided by equipment makers like Sony Corp. or Nokia Oyj, and software developers.
TI got a big name when Microsoft -- long inseparable from Intel -- chose its product to develop a smart phone code-named "Stinger," though the endorsement isn't exclusive. Nokia, Ericsson and Sony have also said they like TI's technology.
Last week Intel fired back, announcing some 50 endorsements from equipment makers and software houses.
In the end, Mr. Mathias said, the chips will fall where the customers want them.
"It's all about what products those chips end up in," he said.
Jim |
