re: Chip Stuff - ARM (ARMv6), Intel (XScale), TI (OMAP)
>> Suppliers Foresee Healthier Market for Handsets in 2002
Darrell Dunn
EBN
08/06/01
As analysts suggest that the cellular handset market may now be touching bottom, semiconductor suppliers like ARM Ltd., Intel Corp., and Texas Instruments Inc. last week announced agreements and process developments that are expected to yield improved chips for what is projected to be a stronger mobile phone market in 2002.
Christopher Danely, an analyst at Merrill Lynch & Co. Inc. in San Francisco, said handset inventory levels at the three largest cell phone OEMs -- Nokia, Motorola, and Ericsson -- are now at their lowest point since 1999, and fourth-quarter handset sales could increase 20% sequentially.
"We're starting to see reordering in value-added components such as power amplifiers, DSPs, and low-power SRAMs," Danely said. Excess inventories remain for such components as flash and passives, a situation that's not likely to be alleviated until early 2002, he added.
IC suppliers are also speaking more optimistically. "We're now seeing signs of stabilization and believe semiconductor revenue is nearing the bottom," said Bill Aylesworth, senior vice president, treasurer, and chief financial officer at TI, during the company's recent quarterly briefing. "[Handset OEM] customers have clearly made progress in reducing excess inventory. ... Our orders [for cell phone chipsets] grew sequentially in the second quarter, reflecting [the] progress."
A boost from new technologiesAylesworth believes the emergence of newer handset technologies such as general packet radio services (GPRS) will lead to increased demand from customers creating new mobile phone designs, although the company is also getting new customers for 2G designs.
"I expect to see a rebound in the fourth quarter," said Will Strauss, an analyst at Forward Concepts Co., Tempe, Ariz. "October is when it will become evident. People will be buying new GPRS phones, and I believe next year there will be a feeding frenzy."
An invigorated end market for handsets would be welcome news to OEMs and IC suppliers alike, who are suffering through a year in which projections for sales of cellular handsets have been frequently lowered. After starting the year with a prediction that about 500 million cell phones would be shipped this year, up from 415 million in 2000, Merrill Lynch has dropped its projection for 2001 to 390 million units.
And TI believes that in 2000, there was an excess of 80 million cell phone chipsets shipped, leading to the inventory problem at TI and other handset-IC suppliers that is now being corrected, Aylesworth said.
Despite the difficulties of the past year, and with their eye on an impending upswing, IC makers are moving forward with plans to provide improved chipsets for the mobile phone market. Last week, ARM, Cambridge, England, announced licensing agreements with TI and Intel for its sixth-generation processor core, the ARMv6, which is expected to be implemented in handset designs beginning late next year.
Details of the ARMv6 architecture are scheduled to be announced in October. Robin Saxby, chairman and chief executive of ARM, said the ARMv6 will provide for improved video and audio functionality. ARM has worked with key licensees on development of the ARMv6, including TI, Intel, and Motorola Inc.'s Semiconductor Products Sector (although Motorola has yet to license the new architecture).
Peter Green, general manager of Intel's Handheld Computing Group, said the ARMv6 will be integrated into the company's XScale processor beginning late next year.
XScale is the key to Intel's plans to become a player in baseband chipsets for mobile phones. The Santa Clara, Calif., company expects to begin selling baseband chipsets early next year that will rest on both its XScale processor and Micro Signal Architecture DSP, which it co-developed with Analog Devices Inc.
TI in the hunt, too Gilles Delfassy, senior vice president and general manager of TI's Wireless Business Unit in Dallas, said the ARMv6 will be incorporated in the company's Open Multimedia Applications Platform (OMAP) chipsets, which are designed around its TMS320C55x DSPs. Delfassy said he does not expect significant revenue from the ARMv6 chipsets for a couple of years.
Meanwhile, TI and Sun Microsystems Inc. announced last week that qualification tests on the first copper-interconnect versions of the UltraSparc III microprocessor have been completed, with production quantities expected to begin shipping within three months.
These are the first copper-interconnect devices manufactured by TI, which expects to incorporate the process into its own DSP offerings for cellular handsets and other wireless products within the next six months, said Julie England, vice president of TI's Sun Business Unit.
The company plans to qualify its newest fab, DMOS6, a 300mm-wafer, 0.13-micron copper process plant, by the end of the year. Wireless chipsets will be among the first devices produced at the fab, according to Roy Slaymaker, vice president and manager of investor relations at TI.
Previous generations of the Sparc processor have used aluminum-interconnect technology. By using copper, the processor is able to increase performance speed to 900MHz while maintaining the same power dissipation as the 750MHz version, said David Yen, vice president and general manager of Sun's Processor Products Group in Mountain View, Calif.
Similarly, as TI moves production of DSPs to a copper process, it should be able to increase DSP performance while maintaining dissipation levels, or maintain performance levels and decrease power consumption, Slaymaker said. <<
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