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Asia claims higher stakes in wireless

Posted: 01 Jan 2004 ?? ?Print Version ?Bookmark and Share

Keywords:rf? wireless? wman? wlan? phs?

At a time when wireless silicon is growing faster than the overall semiconductor market, Asia's design engineers are taking on complex design jobs to claim stakes in the ubiquitous air: wireless LAN and 2.5G/3G wireless.

While 2004 will welcome Korean handset design firms at a higher plateau, Taiwan design houses would be seeking a strong footing in areas like RF and baseband, once the hallmark of western electronics giants. And Asia's wireless food chain, starting from WLAN chips and wireless MAN (WMAN) products, goes all the way up to personal handyphone system (PHS) and TD-SCDMA-based 3G wireless.

This year will bring a major milestone for mainland China's wireless market. In 2003, the Chinese government implemented the first phase of the 3G trial. The test successfully achieved point-to-point compatibility for handsets in W-CDMA, cdma2000 and TD-SCDMA network environment. The trial also paved the way for the Ministry of Information and Industry (MII) to allocate 155MHz chunk of spectrum for TD-SCDMA wireless system.

This year, the second phase of the 3G tests will commence and is expected to be completed by year end or early next year. During this stage, it is expected that the various functions such as interoperability, stability, maturity and compatibility of equipment terminals from various manufacturers will be tested. Moreover, the second phase trial is also expected to improve various operation strategies and other industry-related policies surrounding 3G and TD-SCDMA.

Mainland companies have made huge investments in 3G R&D and are looking to initiate technology licensing this year. These firms are determined to develop the complete 3G supply chain--especially on the IC and software design side.

Converged handsets

In Korea, as mobile communications shifts from voice-centric services to multimedia messaging, the trends in the evolving handset designs are becoming prominent. The demand for more advanced handset features, such as digital cameras, natural sounds and high-resolution displays, will be making waves this year.

"In the future, all handsets will evolve to become converged handsets," said Huwang Ki-Soo, president and CEO of Core Logic, a back-end IC provider for camera phones. "As the long-term digital convergence trends continue, these multimedia handsets capable of wireless Internet, computing and multimedia functions will become trendsetters," he added.

However, Sam Kim, president of ARM Korea and in-charge of operations in the Asia-Pacific region, noted a number of "mobile handset design issues--such as power consumption, performance, design complexity and security for various services like mobile banking and multimedia entertainment--that are being raised." To be able to solve them, Kim said, IP core companies should look for ways to cooperate with third-party solution providers.

According to Song Sauk-Hun, principal analyst of Gartner Korea, with average prices for handsets keep falling, their constituents like applications, software, OS, components and manufacturing will show signs of being specialized for each segment." He added that Korean mobile-handset companies are expected to expand component outsourcing when they get to build up overseas production networks. He cited Samsung as an example. When Samsung expanded its procurement of made-in-China components, the company began to purchase components directly from Tianjin and Shenzhen factories and was recently engaged in negotiations with Chinese handset-battery manufacturers.

The 802.11 shift

Another wireless segment expected to continue positive growth in 2004 is WLAN. For the WLAN market that has made its mark in the past couple of years, Taiwan seems to have become one of the immediate beneficiaries.

Last year, Taiwan's IC designers grabbed some share in the growing WLAN market for 802.11b chips. According to IEK, the 802.11b chips accounted for 82 percent of the WLAN products shipped in the first half of last year.

WLAN growth in Taiwan opened up a lot of business opportunities. However, based on past experiences, whenever manufacturers focus on certain markets and make heavy investments, that particular market soon experiences an inevitable price war - and WLAN is no exception. According to IEK, in Q2 of last year, when WLAN was growing rapidly, the average price for wireless NICs dropped to $42 - 31 percent lower than in Q1.

Still, Taiwan chipmakers continue to venture in the WLAN business. And as the magic of the 802.11b slowly loses its charm, manufacturers are eyeing market for the 802.11g chipsets. "Since 802.11g is backward compatible with 802.11b standards, it has a chance to become the mainstream market after 802.11b as long as performance and price points are acceptable to consumers," said Thomas Chou, WLAN product marketing manager of Realtek Semiconductor Corp. The diminishing price difference between the two chips is making many industry observers believe the 802.11g will soon replace 802.11b.

According to Vita Teng, an industrial analyst at the Industrial Technology Research Institute's government-funded Industrial Technology Information Service (ITIS), the real shift will happen in the second half of this year. In the first half, Teng says, the output of 802.11b will remain higher than that of 802.11g. "It will be after Q2 of this year that the output of 802.11g will gradually surpass 802.11b."

With rapid growth of WLAN silicon in 2003, many manufacturers are expanding into design of WLAN RF and baseband chips. Besides Realtek Semiconductor, other Taiwan makers including Airoha Technology and ADMtek Inc. have also disclosed their development plans for 802.11g chips.

Intel's strategy of aggressively promoting its Centrino technology has added fuel to the WLAN market. The move by the top chipmaker is virtually making WLAN the standard configuration for notebooks.

Rising WMAN stakes

A coming attraction in the wireless world is the rise of various network applications. The IEEE 802.16 (WiMAX) - a wireless metropolitan area network (WMAN) technology - is a broadband carrier that provides services like digital AV broadcasting, digital voice transmission, ATM, wireless-based Internet telephony and frame relay with the bandwidth dynamically adapted to various applications and environments. A potential threat to 3G, according to some industry observers, the WiMAX is set to make its identity in the wireless realm.

However, You Xiahou, team leader of China's 3G mobile communication R&D project, said that WLAN and WiMAX are high-speed asynchronous technologies that provide data exchange between the PC platform and the Internet, while 3G is based on the existing mobile communications technology that enables real-time AV transmission and broadband data services. Xiahou further opined, "The former can't provide wireless-data services at anytime, anywhere like 3G, unless a huge amount of money and time is poured into the infrastructure."

While 3G and WLANs are expected to significantly grow in the coming years, the pursuits for 4G standard may well be at hand. One key indication of this shift is rather unexpected rise of the PHS. The PHS' presence in the broadband scene in 2004 can be attributed to the progress this combo cordless/cellular technology made in 2003. Some telecom carriers in China are also launching various combined network solutions: China Telecom has a combo GPRS/WLAN service while China Unicom is supporting CDMA 1X/WLAN duo applications.

As the stakes for higher-speed networking paraphernalia and broadband equipment get even higher, mainland manufacturers are scrambling for necessary adjustments to take on the challenge of delivering high-quality, low-cost products. Ramping automotive market in mainland has become a driving force for wireless telematics, and subsequently for embedded GPS applications. Software radio technology and programmable baseband chipsets also represent bright spots.

While mainland China anxiously awaits the implementation of 3G licenses and the WLAN market continues to roll on a hot streak, wireless industry's momentum in the region will be a worthwhile affair to watch. The demand in both cellular and WLAN segments is high, and industry players seem to be making necessary preparations to be able to deliver.

- Majeed Ahmad

Electronic Engineering Times - Asia

* Rey Buan in Manila, Lee Ju-Yeun in Seoul, Joy Teng in Taipei and Simon Zhou in Shenzhen contributed for this story.

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