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To: John Rieman who wrote (35382)	8/21/1998 7:08:00 PM
From: BillyG	Read Replies (1) \| Respond to of 50808

Chroma-erratic............ pubs.cmpnet.com A service of Semiconductor Business News, CMP Media Inc. Story posted at 4:45 p.m. EDT/1:45 p.m. PDT, 8/21/98 Chromatic switches from chipless to fabless model By Mark Hachman Electronic Buyers' News SUNNYVALE, Calif. The intellectual-property industry might learn a lesson from Chromatic Research Inc., which has decided to abandon the "chipless" business model it helped pioneer. In July, Chromatic discontinued the Mpact, a media processor manufactured by hardware licensees LG Semicon, STMicroelectronics, and Toshiba. see July 10 story). Now, Chromatic executives say their design teams will concentrate on a stand-alone chip that a foundry, not a licensing partner, will manufacture as part of a shift to a fabless strategy. "It's not an indictment of the generic chipless model," said president Dave Holt. Nevertheless, Chromatic has recognized that the market conditions which fostered the creation of its chipless strategy have changed in the five years since the company's founding he added. Both Chromatic's Mpact media-processor core and its decision to license the design were born in September 1993, when foundries were in high demand. As a start-up, Chromatic didn't have the capital to purchase all the required wafers, so it licensed the Mpact instead. A glut of fab capacity, plus Chromatic's refusal to let its licensees tamper with the software portion of the Mpact design, resulted in a shift to the more traditional fabless model last month. While Chromatic may seem like a latecomer to the more pervasive fabless strategy, Holt hinted that the company might again have a unique approach in mind. "We still have our existing relationships with three top semiconductor manufacturers, which we plan to continue," he said.