Another (longer) article related to 3-G. Excerpts:
"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."
"Besides Japan, nobody is going to make money in 3G in
the United States or Europe until about 2005..."
TI, PMC-Sierra snap up DSP firms in 3G cellular
July 4, 2000
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
technique 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 Delfassy, 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 promised 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 c 2000 CMP Media Inc.
By Will Wade and Margaret Quan |
