TAIPEI, Taiwan -- In a bold move to compete against Texas Instruments, Qualcomm, and others, Taiwan's Via Technologies Inc. here today entered the cellular-phone chip set market, announcing it has acquired the CDMA product operations from LSI Logic Corp. for an undisclosed price.
Under the terms, the Taipei-based PC chip set giant will acquire LSI Logic's CDMA standard products design center in San Diego. The center specializes in the development of advanced CDMA-based integrated circuits for next-generation wireless mobile voice and data applications. No other details were given, however.
LSI Logic offers a CDMA chip set for 2G/2.5G handsets, but it's unclear if Via will pick up the product line right now. The U.S. ASIC giant entered the CDMA chip set business in the late 1990s, but it recently put the operation up for sale. In January, LSI Logic announced it would cut 1,400 jobs, or 20% of its total workforce, while divesting its CDMA and DSL products units (see Jan. 16 story ).
The Milpitas-based company exited the CDMA chip set market, reportedly after an unsuccessful bid to compete against the leader in the arena--Qualcomm Inc. The San Diego-based company has 90% market share or more in the CDMA chip set world, analysts said.
Even mighty Intel Corp. and Philips Semiconductors have been unable to compete against Qualcomm, as both of these IC giants have separately bailed out of the CDMA chip set arena in recent times.
In fact, Via could face a major problem with Qualcomm. Based on past history, it is unclear that LSI Logic's CDMA license with Qualcomm will transfer to Via, according to analyst.
Meanwhile, besides Qualcomm, Via will compete against other major players in the cell-phone chip set segment, including Texas Instruments Inc. TI does not directly compete in the 2G-enabled CDMA chip set business, but the Dallas-based company is the overall leader in the baseband market. (Cell-phone chip sets are sometimes called baseband processors.)
TI's digital signal processors (DSPs) are used in the rival GSM and TDMA camps by the Nokia Group and other handset players. TI also sells a DSP-based platform for 3G-enabled handsets, based on CDMA technology, it was noted.
In fact, Nokia makes its own CDMA chip for its own phones; the cell-phone giant does not sell these ICs in the merchant market, analysts said.
Other major suppliers of cell-phone chip sets include Analog Devices, Infineon, and Motorola. Intel does not compete in CDMA, but it has a TDMA chip set, as well as a RISC processor, based on the StrongARM architecture, for handheld devices.
But that's not stopping Via from entering the high-stakes game. "This agreement marks an exciting new milestone for Via," commented Wenchi Chen, president and CEO of Via. "It will not only enable us to further strengthen our wireless development capabilities through the addition of a world class design team, but is also takes us one step closer towards the realization of our 'Total Connectivity' vision," he said.
Via's "Total Connectively" vision refers to the company's plan to become a one-stop shop of chip products. The company not only sells PC chip sets, but it also develops ICs for CD ROM, communications, and optical applications.
While Via is the world's second largest supplier of PC chip sets, the company has not succeeded in all markets. Several years ago, it acquired the separate x86-based microprocessor businesses from Cyrix and Integrated Device Technology. But Via is a bit player in the microprocessor market, compared to Advanced Micro Devices Inc. and Intel, according to analysts.
Via does participate in the communications market with a line of Ethernet-based switch and media-access controllers. But analysts believe that the wireless chip market requires a new set of skills to compete against the major players in that arena.
Just ask Intel, Philips, and, of course, LSI Logic. Several years ago, in an effort to establish to CDMA market, Qualcomm licensed its CDMA chip set technology to several companies, including DSP Communications, LSI Logic, PrairieComm, and VLSI Technology. Qualcomm also developed its own chip sets as well.
Philips entered the business by acquiring VLSI Technology several years ago. And in the late 1990s, Intel entered the market by acquiring DSP Communications. But when Intel and Philips made their separate acquisitions, Qualcomm abruptly terminated their respective CDMA licensing agreements. Both Intel and Philip were forced to re-negotiate a hefty licensing fee with Qualcomm.
It was a moot point, however. Intel bailed out of the CDMA chip set business about two years ago, while Philips recently exited the area as well. PrairieComm Inc. has announced CDMA chip sets in the past, but the company is a minor player in the arena. It specializes in chip sets for TDMA and GSM applications.
