It used to be that the analog market was a haven protected from the intense price competition that Asian companies usually introduce to a sector. No more. Using the wireless-LAN market as a beachhead, three Asian companies specializing in RF design are looking to seize market share from the likes of RF Micro Devices, Maxim and Philips.

The formula for these challengers is simple: Offer similar or good enough performance-for less. Then leverage their on-the-ground presence in Asia, specifically Taiwan, where most of the WLAN component and system makers have R&D and manufacturing operations. Moreover, a flurry of new suppliers of baseband/ media-access control (MAC) chips, ranging from well-known PC chip set providers like Silicon Integrated Systems and Via Technologies to startups like InProcomm, Telewise and ADMtek, have opened here in the past several months.

As the wireless-LAN market devolves into a tit-for-tat pricing brawl, bringing down the cost of the RF front end will be critical. "We're looking at low-cost RF vendors that can hit the dirty low target," said Craig Conkling, marketing manager at InProcomm (Hsinchu, Taiwan). "It's amazing; 50 cents can make all the difference in the world."

This sort of environment could prove fertile ground for three relatively new companies: Airoha Technology Corp., Ralink Technology and GCT Semiconductor. All of them have strong backing from Taiwanese and U.S. companies.

Airoha, a subsidiary of BenQ Corp., will be able to sell chips into that company as well as others. Ralink has drawn investment from Taiwan's top motherboard maker, Asustek Computer, as well as the TSMC venture fund and memory specialist ISSI Corp. GCT, which has headquarters in Silicon Valley but does its R&D in Seoul, South Korea, includes National Semiconductor Corp. and Pericom Semiconductor Corp. among its benefactors and has a close relationship with foundry United Microelectronics Corp.

The next several months will be the most critical in the development of these companies. The 802.11b market is already under heavy price pressure, which will give the newcomers an opportunity to win sockets if they strike the right price/performance balance. All three have been pursuing their RF strategies for at least two years and have taken slightly different approaches in fielding 802.11b chips.

The familiar story of Taiwan Inc. is based on digital design expertise, deftly honed over the course of two decades. The mixture of analog circuit experience and "black magic" that characterizes the RF IC design business was the realm of gray-haired journeymen in Silicon Valley and Europe.

As the post-PC era unfolds, however, Taiwan's electronics companies are looking for new markets. There is a slow shift to consumer and communications products, where RF components are prominent. Lee Sheng, chief technology officer at Ralink, said RF IC design has been one of "the last frontiers" for the Taiwanese.

At Airoha, president Michael Lu likened the market to a picture of a crown, with its minor jewels representing various parts of the IC industry here. A ruby for DVD chips, sapphires for memory and peripheral chips, a pearl for PC chip sets and so on. Atop the crown, but not yet joined to it, is the equivalent of the Hope Diamond. "RF is the missing diamond on this crown," Lu said. "Airoha wants to be that missing diamond."

The architectures and business strategies of these companies vary quite a bit. Airoha and GCT favor single-chip direct conversion, which puts the onus on the radio to bring the zero-IF intelligence-only signal to the baseband. Ralink is pursuing a superheterodyne method, and thinks that a two-chip RF is good enough for now. GCT is using an RF CMOS process, while Ralink and Airoha prefer a more mature silicon germanium BiCMOS process, which should have better yield. Ralink is looking into the timing of a switch to RF CMOS, while Airoha is exploring using a pure-CMOS circuit design.

Ralink is also offering its own baseband/MAC, yet highlighting its RF expertise. GCT and Airoha are RF companies.

It's difficult to assess which one will be the most successful in the WLAN market. What's certain is that each will have a play, said Mike Feibus, a communications analyst at TechKnowledge Strategies Inc.

"Taiwanese suppliers like Realtek, ADMtek and ZyDAS have put pricing pressure on baseband/MAC logic," Feibus said. "And while they are all paired with Maxim, RFMD or Philips today, they are all working with at least one of the Asian RF vendors. Those guys are already having an impact in the market-just watching the 2.4-GHz RF pricing says that."

The simmering debate over which is more practical at this point, zero IF or low IF, may not be the sole determining factor in the early rounds of competition. RF CMOS vs. SiGe may also have a role. "One day, CMOS will definitely be king in radios. But today, it's not clear that CMOS has a cost advantage over BiCMOS or SiGe BiCMOS, due to yields," Feibus said.

Even as they duke it out among themselves, these companies must worry about U.S. and European suppliers. No one expects them to quit easily. But a comment from Lu is telling about what it will take to succeed in this new market: "Engineers are cheaper here, so I can survive on slimmer margins. How can they compete?"