Global Sources
EE Times-Asia
Stay in touch with EE Times Asia
EE Times-Asia > Manufacturing/Packaging

ST, ARM challenged by TI shift

Posted: 26 Jan 2007 ?? ?Print Version ?Bookmark and Share

Keywords:Texas Instruments? STMicroelectronics? process development? ARM? Freescale?

The decision by Texas Instruments Inc. (TI) to end leading-edge process development at the 45nm manufacturing node and rely on foundries thereafter, is set to have important implications for European electronics firms, according to Didier Scemama, an analyst with ABN-Amro Bank, in a note distributed to clients.

Scemama indicated that the move by TI highlights a sea-change occurring in the industry; one for which the likes of Infineon Technologies AG, CSR plc and Wolfson Microelectronics plc are relatively well prepared but for which older companies STMicroelectronics NV (ST) and ARM Holdings plc appear less ready.

The move, according to Scemama, is clearly a strategic one, reflecting that foundries have now more or less caught up with independent device makers (IDMs) so that owning processes and manufacturing plant is ceasing to be a differentiating advantage.

"TI's decision...puts additional pressure on fellow IDMs such as ST, whose product portfolio lacks IP and system software, particularly in wireless. In order to adapt, ST may have to make substantial R&D investments and/or substantial acquisitions. Simply put, ST's business model is not adapted to this new environment, which makes us cautious about its medium-term prospects," said Scemama in his note.

Scemama also observed that with the departure of NXP BV and Freescale Semiconductor Inc. from the Crolles R&D alliance, ST could be faced with increased capital and R&D spending if it is forced to finance the next phase of its process development research on its own.

The departure of TI from leading-edge process development is also a negative indicator for ARM, a licensor of chip making and processor IP, the analyst said. Again the implication is that world of process development is collapsing to just a handful of large IDMs and foundries and one or two multi-company consortia. While ARM expects its physical IP business to take off with IDMs over the next five years, Scemama sees TI's announcement as a warning that "ARM's Physical IP business may never take off."

In particular the TI decision may have been influenced by thinking at Nokia to extend a greater part of its mobile phone business to ODM manufacture, Scemama said. "We believe that it [TI's decision] has to be motivated by discussions the company had with its most important customer, Nokia."

Scemama added that TI's decision could indicate that Nokia intends to open up its designs to standard products for both the digital baseband and the RF, which may benefit Infineon. At the same time, a move to open platforms across the mobile phone industry could open up opportunities for Wolfson at Nokia, Sony Ericsson and Motorola, either via OEM manufactured models or via ODM-outsourced models.

- Peter Clarke
EE Times Europe

Article Comments - ST, ARM challenged by TI shift
*? You can enter [0] more charecters.
*Verify code:


Visit Asia Webinars to learn about the latest in technology and get practical design tips.

Back to Top