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To: David Lawrence who wrote (15826)	6/2/1998 8:30:00 PM
From: Glenn D. Rudolph	Read Replies (1) \| Respond to of 22053

Motorola, Lucent in chip design alliance Reuters Story - June 02, 1998 19:25 %ELI %ENT %US %ELC T LU MOT V%REUTER P%RTR (Adds details, comments from news conference) SAN FRANCISCO, June 2 (Reuters) - Motorola Inc. and Lucent Technolgies Inc. Tuesday said they would collaborate to design next-generation digital signal processor technology, to create chips used in many wireless and communications devices. Under the deal, Schaumburg, Ill.-based Motorola and Lucent, based in Murray Hill, N.J., will work together to develop designs for new digital signal processor (DSP) technologies and cross-license their existing digital signal processor designs. The alliance will accelerate development of advanced processors for the communications, transportation and consumer electronics industries, Motorola and Lucent said. The companies will create a joint design center, with about 100 designers, in the Atlanta area called Star*Core. The center will open by the third quarter of this year and the companies expect to complete their first core design by mid-1999. The core design, which is a building block for customized chips, will be used by both companies to develop new DSPs, which are one of the fastest growing segments of the world semiconductor industry. According to market researcher Forward Concepts, a Tempe, Ariz.-based company, the general-purpose DSP market is forecast to reach about $4.1 billion in revenues this year and grow to slightly over $14 billion by the year 2002. However, actual semiconductors and products using the chips incorporating the core design will not reach the market for about two years. "End products are two years (away) or slightly less from now," said John Dickson, president of Lucent's Microelectronics Group. The companies declined to disclose their individual investments in the venture, but said they were 50-50 partners. In consumer products, advanced digital signal processors resulting from the alliance could be used in handheld wireless devices for accessing the Internet, cellular phones with video capability and devices with speech recognition capability. The companies are collaborating on designs and they will separately develop and market full-fledged digital signal processors based on those designs. James Boddie, a Bell Labs fellow and director of digital signal processor development for Lucent, has been appointed executive director of the joint design center. Lucent, which is a spin-off from AT&T Corp. has a long history with DSP chips. The first DSP was developed almost 20 years ago at Bell Labs, which is now part of Lucent. Both Lucent and Motorola have a portfolio of DSP products. Future DSPs will have faster performance, lower power consumption and lower cost. Shares of Lucent, which announced other partnerships on Tuesday, jumped $2.75 to $71.69, while Motorola tacked on 50 cents to $52.50, both in consolidated trading on the New York Stock Exchange.