Q4 sees buys, mergers, and a niche player worth watching

According to the French newspaper La Dépêche du Midi, Intel is planning to purchase Freescale’s wireless operations in Toulouse. We think the story has legs. It’s clear that Intel desperately wants to get back into the cellular chip business, if for no other reason than to beef up 3G capability for its fast-growing netbook and Mobile Internet Device (MID) chip business. And Intel does not want to be slaves to wireless king Qualcomm, which is beginning to field its ARM-based Snapdragon chips directly against Intel’s Atom family.

Intel has zero RF capability, so the Toulouse operation could fill in that key wireless technology slot. Frankly, we couldn’t understand why Intel didn’t buy Freescale’s entire Cellular Products Division earlier, when it could have bought the unit on the cheap, thereby instantly gaining 3G chips for its own use. But, with the musical chairs recently being played out in Intel’s executive suite, new thinking may be taking hold.

MediaTek breaks out of China market

European mobile operator Vodafone has selected MediaTek chipsets for two new handsets. The first device, the Vodafone 340 camera phone, is an entry-level 2.5G device, while the Vodafone 541 is an entry-level touch-screen device. Since MediaTek has announced volume shipments of WCDMA chips by early October, the company will continue capturing handset market share, and now on a global basis.

MStar Semiconductor breaks into cell phone market

MStar Semiconductor, Inc. is known in Taiwan as “Little M,” since MediaTek is considered “Big M.” Until recently, MStar was content to be the world’s leading LCD TV image control chip maker. But, through its acquisition of the French design house VMTS, MStar is now entering the cell phone chip market with the aim of cutting into MediaTek’s China dominance. In 2006, VMTS licensed CEVA’s Teak DSP IP to power its V2751 baseband processor for GSM/GPRS/EDGE mobile handsets and licensed ARM’s 926EJ-S for multimedia functionality. MediaTek has muted its 2010 China shipment forecast specifically because of the new competition.

NEC CASIO Mobile Communications: New merged handset player

Although not effective until next April (the new fiscal year for companies in Japan), NEC, Casio, and Hitachi have announced plans to merge their respective mobile phone divisions into a single joint venture. After a capital injection by NEC and Casio, the company ownership will be: NEC: 70.74 percent; Casio: 20 percent; and Hitachi: 9.26 percent. The board of directors will be made up solely of NEC and Casio representatives. NEC has primarily supplied WCDMA-centric handsets to NTT DoCoMo and Softbank, while the current Casio-Hitachi partnership has supplied CDMA handsets to Softbank and KDDI in Japan, Verizon in the U.S., and LG Telecom in Korea. Japanese cell phone companies seldom target their sales efforts outside of Japan, limiting their global market penetration. Perhaps bulking up in this manner will embolden the players to more heavily target the U.S. and Europe.

NEC and Renesas to merge chip business

Also to be concluded by next April, NEC and Renesas have agreed to merge their total chip businesses, creating an entity that will make them the Number 3 semiconductor manufacturer, relegating Toshiba to the Number 4 spot. Both NEC and Renesas are in the cellular chip business, too, so presumably the merged company will be a major chip supplier for handsets at the new NEC CASIO Mobile Communications entity. Just as Japanese cell phones are seldom sold outside of Japan, Japanese cellular chip makers seldom target foreign sockets, limiting their total wireless sales. This is odd, considering that both companies target their MCU sales on a global basis, though NEC seems to have greater presence in Europe than in the U.S.

Black Sand Technologies debuts first CMOS PA for cell phones

Power Amplifiers (PAs) for cell phones have long been the purview of Gallium Arsenide (GaAs) technology. Black Sand Technologies Inc. (Austin, Texas) aims to grab some of that market with its new 3G CMOS PA, said to be the first in the industry. The company claims that its CMOS PAs have better yields than GaAs devices and achieve higher performance while reducing total cost, size, and power consumption. The company’s CEO, John Diehl, is no stranger to the wireless world, having been CEO of cellular chip maker PrairieComm before Freescale acquired it in 2005.

Samplify Systems: Niche player with no competitors?

Tiny Samplify Systems, Inc. (Santa Clara, California) has a novel solution to shoving a fire hose stream of analog/RF signals through an available straw. For example, in distributed antenna systems, its product enables RF signals to be distributed over existing CAT5 cables, thus eliminating the need to install (more expensive) fiber optics. Samplify is said to provide the world’s only true 16-channel, 12-bit, 65 MSps ADC ICs with integrated data compression technology. Already working with CT and ultrasound scanners, the company’s lossless signal compression technology also targets cellular base station remote radio heads.

Shameless plug

Our newest market study, “Ultra Mobile Device & Chip Market Opportunities,” lays out the dynamics of the emerging market for netbooks and MIDs and forecasts these devices and the many chips that enable them through 2014. As always, I invite your comments.

Will Strauss

President & Principal Analyst


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