Intel Backs Away From CDMA
Chip Market
(08/25/00, 5:33 p.m. ET) By Mark LaPedus, Semiconductor Business
News
In a setback for its fledging cell phone semiconductor
business, Intel is quietly backing away from the CDMA
chip set market as part of a plan to focus on new and
more promising wireless IC segments, SBN has learned.
The Santa Clara, Calif.-based company entered the
IS-95-compliant chipset market for CDMA handsets only
eight months ago after agreeing to acquire cell-phone IC
specialist DSP Communications Inc. for $1.6 billion. But
Intel Corp. (stock: INTC) had little luck in garnering
design wins in CDMA, due in part to stiff competition
from the leading supplier of chip sets in this booming
business -- Qualcomm Inc. (stock: QCOM), San Diego,
analysts said.
Instead of CDMA, Intel will focus more on developing
and selling cell phone chipsets for other digital cellular
standards,such as TDMA, PDC, and third-generation
(3G) wireless, according to Ronald Smith, vice president
and general manager of Intel's Wireless Communications
and Computing Group.
"We are not focusing on the CDMA market," Smith said
in an interview at the Intel Developer Forum in San Jose,
Calif., this week. "We're still selling the PDC chip set.
We announced a TDMA chip set. We are also interested
in wideband CDMA [W-CDMA], but [IS-95-compatible]
CDMA is more of a proprietary market."
Smith's comments were made in reference to
Qualcomm's dominant position in the CDMA chip set
market. Though Qualcomm has licensed its CDMA chip
technology to several IC vendors -- including Intel, LSI
Logic Corp. (stock: LSI), Philips Electronics NV (stock:
PHG), and PrairieComm -- the company had an 89
percent share in the worldwide IS-95-compliant,
CDMA-based chip set market in 1999, according to
Hambrecht & Quist LLC of San Francisco.
When Intel acquired DSP Communications last October,
however, it hoped to give Qualcomm a run for its money
in CDMA. At that time, Intel was expected to leverage
its vast resources and fab capacity to grab significant
market share away from a much smaller entity in
Qualcomm.
Competitors believed Intel was never a factor.
"Intel had a few design wins, but I never saw them in the
market," said Johan Lodenius, senior vice president of
marketing and product management at Qualcomm's
CDMA Technologies Division, the chip and software
arm of the company.
Now, Intel is looking for new and better opportunities in
the cell phone IC market, such as non-CDMA chip set
lines, RISC-based controllers, flash memories, and other
devices, according to Smith.
"The [cell phone] market is very robust," Smith said.
"The demand for our flash memories and other products
is also very robust."
Smith added that Intel is more bullish on a
next-generation CDMA standard called W-CDMA,
which is being endorsed by Motorola Inc. (stock: MOT),
Nokia AB (stock: NOK), NTT Corp. (stock: NTT), and
other large OEMs and carriers. In theory, 3G enables
cell-phone products to obtain wireless data at speeds up
to 2 Mbits.
3G is expected to be deployed in Japan in 2001, followed
by Europe and the United States. With Japan looking to
take the lead in 3G, Intel wasted no time in finding a
partner in that nation. Last May, in fact, Intel and
Mitsubishi Electric Corp. announced a deal to co-develop
a chip set for 3G-enabled cell phones.
The company also has high hopes for a new line of chips
for cell phones, PDAs, and other products. Introduced
this week at the Intel Developer Forum, the company's
new XScale product is a new architecture designed for
low-power, handheld equipment.
Intel is also co-developing a promising line of DSPs with
Analog Devices Inc. (stock: ADI), which will be a key
part of the company's cell-phone chip strategy, Smith
said.
"[The DSP] is on schedule," Smith said. "We expect to
disclose the details later this year."
Analysts believe the DSP from the Intel/ADI duo will be
not be shipped until the end of this year.
"My guess is that Intel won't disclose anything about the
DSP until November," said analyst Will Strauss of
Forward Concepts Co., Tempe, Ariz.
techweb.com |
