Contributors: Bob Wheeler, Jag Bolaria, Joseph Byrne In This Issue
What's Next for Nexperia? The sale of Philips' semiconductor business to a group of private-equity firms led by KKR does little to resolve the future of the company's Nexperia products for wireless handsets. We estimate Nexperia's share of the baseband-processor market at nearly 7%—significant, but not big enough to be profitable. As handset processors integrate more functions and as air interfaces become more complex, the cost of developing a complete package of silicon and software continues to escalate, leaving those vendors with single-digit share struggling to make money. This is not a problem KKR can fix simply by improving operational
efficiency. An IPO of a money-losing business won't work either.
Therefore, we expect KKR to auction Nexperia to the highest
bidder. A company that wants to enter the handset market
would have to
be very ambitious to think it could turn around the Nexperia
business. Realistically, the product line has the most value
to another handset-processor
vendor that can use Nexperia's market share to scale up its
own business and fill holes in its product line. Broadcom, in contrast, has a history of acquisitions, although Nexperia would be its biggest ever. The company has been trying for years to build a handset-chip business, and adding Nexperia would instantly make Broadcom a major player while filling out its product line with RF, power management, and mobile TV. With only 1% share today, Broadcom needs to do something big to jumpstart its handset efforts. STMicroelectronics, which shares a fab with Philips (and Freescale), could add Nexperia processors to its strong RF and ASIC businesses. Infineon and Agere also need to expand their handset share. Infineon could benefit from Nexperia's multimedia capabilities, but it is already a leader in RF products. Agere is the least likely buyer in this group, partly because it already has Samsung as its largest customer. We expect one of these five companies to acquire Nexperia within the next six months. When bidding, each must carefully consider not only how Nexperia would fit into its business, but also whether it would fall behind if a competitor acquires the products instead. Once this transaction is complete, the future of Nexperia will be more clear. —Linley Complete coverage of the Nexperia family appears in our report A Guide to Wireless
Handset Processors. The Wi-Fi Alliance (WFA), the trade group that certifies and promotes 802.11-compliant products, will start in 1H07 to certify interoperability among "pre-standard" products that adhere to the draft 802.11n standard. After the IEEE finalizes the standard, the WFA will begin a new certification process to validate interoperability and conformance to the official standard. The WFA's hope is that the second draft of the 11n specification will be completed and will pass Letter Ballot during 1H07. Even if the IEEE falls behind that schedule, the alliance will proceed with interoperability testing based on the expected content of the draft. The WFA is also hoping that the baseline features described by the specification as it will stand in 1H07 will not change as the spec moves toward subsequent final ratification. However, the WFA acknowledges that pre-standard products may not be compatible with those conforming to the ultimate standard. The WFA's action ameliorates some of the problems stemming from the long period between the availability of 802.11n chip sets and the final ratification of the standard. Interoperability is a minor concern to consumers buying complete end-to-end WLAN set-ups at retail. However, the market is entering a new phase as PC vendors begin to incorporate pre-standard WLAN clients in their computers, a practice that will accelerate in 1H07 as Intel includes pre-standard radios in its Centrino bundle. With a pre-standard certification regime, consumers can be assured that their new PCs work with whatever access point they choose. Certification should, if not stimulate demand for pre-11n technology, at least reduce the support cost to vendors and therefore make them more likely to promote pre-standard systems. —Joe Toshiba has licensed the MIPS 24KE CPU for use in digital TVs and set-top boxes. Previously, Toshiba relied on home-grown CPUs such as the TX49 and TX99 as well as the TX79, based on the PlayStation 2 CPU. But the company no longer offers processors based on the TX79 and TX99, and the TX49 is not powerful enough for emerging video applications. The 24KE will scale to 600MHz or faster and includes instruction extensions for DSP and other functions. We expect Toshiba to sample its first 24KE-based processors in 2H07. —Linley Complete coverage of Toshiba's TX49 family appears in our upcoming report A Guide to High-Speed Embedded Processors.
The demand for high-speed processors continues to grow as market opportunities abound for these speedy chips. These devices are ideal for handling the complex functions required by printers, set-top boxes, DTV, automotive, and much more. These applications share a need for speed but also the flexibility that a general-purpose processor provides. These chips use standard instruction sets such as MIPS, PowerPC, and x86, allowing programmers to use a wide variety of operating systems and development tools. This completely revised report provides extensive coverage of high-end embedded processors from a mix of old and new vendors, featuring AMCC, Broadcom, Cavium, Freescale, IBM, Intel, PMC-Sierra, and Raza Microelectronics. Other vendors covered include AMD, PA Semi, SafeNet, Toshiba, and Via Technologies. This
edition covers all the recent announcements, such as the dual-core
PowerQuicc 8572, the PWRficient
chip from
PA Semi,
Intel's Core microarchitecture, and Raza's acquisition
of Alchemy. It also provides market share and market
size data
for the
embedded segments covered. Order A Guide to High-Speed Embedded Processors by September 22 to take advantage of the prepublication discount. For more information on this report, visit our web site. To receive Linley on CE via e-mail, you must register on our web site
|
