Brian Halla of National Semi is betting big on system on a chip - the only way this is possible is .25 and .18 micron. He says PC shipments will go from 70M to 700M over next several years - all due to system on a chip. He says Intel will play in this game - it must.
"NatSem's Brian Halla Envisions
The Era of the $500 Computer
By DEAN TAKAHASHI
Staff Reporter of THE WALL STREET JOURNAL
SANTA CLARA, Calif. -- Brian Halla holds a black box about the size of a thick magazine in one hand and waves it around. It's the next big thing in personal computing, he says -- the $500 PC.
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Brian Halla and his vision of the future
"We know we can build it for $220 in components," says the chief executive officer of National Semiconductor Corp. "This is the beginning of the information appliance."
The machine is more prop than prototype at this point because National Semiconductor hasn't yet perfected the chip-making technology that will enable $500 PCs. The process places circuits as thin as .25 micron -- 1/400th the width of a human hair -- on silicon, which would allow so many transistors that most of the functions of a computer could be included in a single chip.
So-called systems-on-a-chip are already a reality for digital cameras and are close to reality for video-game players, cellular phones and other non-PC devices. As for PCs, Mr. Halla figures his factories will be able to cram 20 million transistors on a chip by the middle of next year, enough to create a PC-on-a-chip that is about as powerful as the sub-$1,000 machines that are taking the market by storm. The chip design would include a clone of Intel Corp.'s best-selling microprocessor and run Microsoft Corp.'s software.
Mr. Halla, who is 51 years old, talks of a day when such PCs will be so cheap that they are built into watches and dashboards, increasing annual PC shipments to 700 million units from 70 million. "This is how the computer fades away and becomes just a part of the landscape, just like the electric motor," he says.
Such super-cheap PCs could threaten plans by companies such as Oracle Corp. and Sun Microsystems Inc. to offer so-called network computers that run off host machines and don't need Microsoft software. They could also threaten the profit margins of Intel.
But some people think of Mr. Halla as a bit of a crazed visionary. Andrew Grove, Intel's chief executive officer, talks of "Brian Halla's fantasies." Intel's president, Craig Barrett, notes sarcastically that to get to 700 million PCs, one out of every two people in the world would have to buy a computer every four years.
Mr. Halla's former boss at LSI Logic Corp., Wilfred Corrigan, thinks it might be suicidal to take on Intel at any price point. As head of marketing and later executive vice president, Mr. Halla helped pioneer the concept of mixing and matching functions on a chip at LSI, but that company is concentrating on non-Intel businesses such as cellular phones and video-game players. "We're not quite bold enough to take on Intel head-on," Mr. Corrigan says.
But Mr. Halla has always shown a flair for bold moves. After marketing microprocessors for 14 years at Intel, he jumped to LSI in 1989 to start its microprocessor business. He invented the term "coreware" to help explain LSI's strategy of mixing and matching libraries of designs so they could be reused in different kinds of chips. To make sure customers got the idea, he erected a huge Mr. Potato Head in LSI's lobby.
Mr. Halla played a key role in reorganizing the company in 1992 to focus on getting big contracts with trend-setting customers. The plan led directly to a contract to help build a video-game player for Sony Corp. The Sony PlayStation, based on a highly integrated LSI chip set, became a runaway hit in 1996 and vaulted Sony recently to the No. 1 position in the video-game industry.
However, Mr. Halla felt restless and frustrated at LSI. "He used to have problems like someone else taking credit for his work," recalls his wife, Carolyn. Shortly after proposing that LSI build an "Internet box-on-a-chip," he left to become CEO of National Semiconductor in May 1996, succeeding Gilbert Amelio, who became head of Apple Computer Inc. until his ouster this year.
Mr. Halla set out to transform National Semiconductor, shedding several layers of management, laying off 600 people, spinning off commodity-chip lines and pouring money into manufacturing and design technologies. He quickly began to acquire most of the parts for a PC-on-a-chip, buying a video-chip company for $100 million and, in his biggest gamble, agreeing in July to buy Cyrix Corp., a troubled designer of Intel-compatible microprocessors, for $550 million. That deal was finalized Monday following approval by Cyrix shareholders.
Monday, National Semiconductor's stock closed at $34 a share, up $2, in composite trading on the New York Stock Exchange, a considerable appreciation over its 52-week low of $21.50 a share.
Cyrix's inexpensive microprocessor already runs Compaq's hot-selling $799 Presarios. This week, Cyrix and National Semiconductor will demonstrate precursors to the PC-on-a-chip, including a $500 network PC with a Cyrix chip, a chip set for managing most other functions, 16 megabytes of memory, a floppy drive, a hard disk and circuits that allow it to be remotely administered by a network manager. A CD-ROM drive is an extra option. To deliver a more complete and powerful system at $500, Mr. Halla plans as early as next year to combine a modem, sound, graphics, power management, network communications and video processing on a single chip, surrounding the core Cyrix processor.
"We've got every one of these parts," he says, pointing at a diagram of a chip.
Every chip company seems to be headed for some level of integration, especially when circuits are miniaturized again with 0.18-micron technology several years from now. With the next cycle, chip makers may be able to put 50 million transistors on a chip.
"The technology is finally there," says Bryan Lewis, an analyst for Dataquest Inc. The market-research firm predicts that even excluding commercial shipments of a PC-on-a-chip, single-chip-system sales will grow to $17 billion by 2000 from $2.2 billion last year.
The big French chip maker SGS-Thomson Microelectronics NV is racing to build a PC-on-a-chip, recently acquiring a majority interest in Metaflow Technologies Inc. of San Diego to obtain a more powerful core microprocessor that can run Microsoft's Windows software. By 2000, SGS-Thomson expects up to 25% of the PC market to be for Intel-compatible information appliances powered by a single chip or a highly integrated chip set. Meanwhile, LSI and Sun Microsystems are working on the Internet box-on-a-chip proposed by Mr. Halla when he was at LSI.
Intel's intentions aren't clear. Pat Gelsinger, an Intel vice president, says, "You can have problems if you overintegrate." Among other things, some of the parts of a single-chip design could be rendered obsolete by new technology. But LSI's chief, Mr. Corrigan, predicts that Intel is "absolutely going to play the system-on-a-chip game."
Mr. Halla still has a few more pieces to acquire. He may need better 3-D graphics technology, as well as a good memory design. But even if the single-chip solution takes longer than expected, he sees its realization as inevitable, explaining: "We've reduced this from an intellectual-property scavenger hunt to an exercise in execution and stitching." |
