LSI plots DSP strategy, buying design house ZSP
Electronic Buyers' News - May 24, 1999
LSI Logic Corp. is acquiring fledgling DSP design house ZSP Corp., adding key in-house digital
processing expertise to its already expansive technology portfolio, EBN has learned.
The purchase, which neither company has formally acknowledged, gives LSI Logic access to one
of the industry's more advanced but unsung DSP architectures, observers said. The terms of the
sale were not immediately available.
As an ASIC house, LSI Logic could use the technology to beef up its communications-IC program,
analysts speculated. They said the company is unlikely to field a discrete DSP to compete against
the likes of Texas Instruments, Motorola, or Lucent Technologies.
Wilfred J. Corrigan, chairman and chief executive of LSI Logic, declined last week to comment on
the company's DSP strategy or its relationship with ZSP. "We will announce our DSP plans in the
next few weeks," he said during a brief interview at LSI Logic's Milpitas, Calif., headquarters.
Although Corrigan did not elaborate, LSI Logic executives acknowledged the importance of DSPs
to the company's future, and noted that LSI Logic has already compiled a large portfolio of DSP
intellectual property.
"DSPs are critical to our wireless strategy," said Giuseppe Staffaroni, vice president and general
manager of LSI Logic's Communications Products Group, which develops LAN, WAN, and
wireless chips.
For ZSP, the acquisition gives it instant market clout, something the company has failed to achieve
on its own.
"Even though the ZSP architecture is quite meritorious, they didn't have the financial muscle to
ensure they could provide the millions of units necessary to take on major market customers," said
analyst Will Strauss of Forward Concepts Co., Tempe, Ariz. "LSI Logic has the financial
wherewithal that ZSP couldn't provide themselves."
To date, LSI Logic has licensed the Carmel DSP core from Infineon Technologies AG, and the
Pine and Oak cores from DSP Group Inc. LSI Logic is also a MIPS licensee, and is believed to be
evaluating the MIPS Radiax DSP extensions offered by Lexra Inc. ZSP represents LSI Logic's
first outright purchase of a DSP technology provider.
Some analysts said LSI Logic may be falling behind in the wireless-chip market and is looking to
jump-start its business.
The company was supposed to ship a CDMA chipset in the first quarter that used an Oak DSP core,
among other components. But the product was delayed by about six months because of integration
issues, according to sources. LSI Logic is also developing a CDMA device for the 3G wireless
standard in an effort to keep pace with DSP Communications, VLSI Technology, and Qualcomm.
Analysts said the ZSP architecture could be tailored to wireless-handset applications but would
require significantly lower power dissipation.
Founded in 1996, ZSP introduced its first product, the ZSP16401, early in 1998. ZSP uses a
superscalar architecture with a five-stage pipeline comprising dual multiply-accumulate and
arithmetic logic units. Analysts said of all the architectures available, ZSP's comes closest to
providing an alternative to TI's VLIW-based TMS320C6x architecture.
By picking up ZSP, LSI Logic is perpetuating a history of buying technology to improve its
position in the system-on-a-chip market. Last July, it acquired Symbios Logic Inc., a company
with expertise in mixed-signal designs and standard-cell libraries. In February 1999, it acquired
Seeq Technology Inc., a supplier of physical-layer ICs and controllers for Ethernet networks.
Whether the ZSP architecture will be used to bolster LSI Logic's position in the wireless-handset or
networking arena, or will play some other role within the company, is a question analysts are still
trying to answer.
And while observers said the chances of LSI Logic entering the discrete market are slight,
competitors lost little time issuing a challenge.
"ZSP has obviously done a nice job designing its architecture," said Andrew Soukup, strategic
marketing director for Texas Instruments Inc. in Houston. "[But] it's going to be very difficult to
overcome the momentum that TI and the traditional [DSP] competitors have in the market with the
largest customers. Those customers are making multibillion-dollar investments, and don't make
architectural decisions lightly."
Copyright ® 1999 CMP Media Inc.
o~~~ O |
