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Renesas puts bid for world market in high gear

Posted: 20 Jul 2010 ?? ?Print Version ?Bookmark and Share

Keywords:LTE? baseband processors? DSP?

Renesas President Yasushi Akao

For a traditional Japanese chip company like Renesas Electronics Corp., the chore of effectively managing and getting superior results from 1,100 Finnish engineers recently absorbed in the acquisition of Nokia's modem business is either a) a tall order or b) the impossible dream.

The move, however, illustrates Renesas' naked ambition to transform itself from a Japan mobile chip supplier to the world's mobile technology leader.

The company wants to assure that its new LTE/HSPA+ modem chips can get connected to global markets. It wants them designed into a host of consumer products, ranging from e-readers, touch-screen devices like iPad to digital cameras and other Mobile Internet Devices, all of which go far beyond standard cell phones.

Further, Renesas is clearly seeking the clout and credibility it needs to drive next-generation mobile modem standards after LTE, by leveraging Nokia's decades-long technology expertise and industry experience in the standards organizations.

Such Renesas' hopes and desires appear all the more ambitious when placed in a global context. Renesas, now mainly the supplier of baseband processors for handsets used in Japan's NTT Docomo network, holds only a 2 percent share in the worldwide market in 2009, according to Joseph Byrne, Senior Analyst at Linley Group.

The 100-day plan

In an exclusive interview with EE Times this week, Yasushi Akao, President of Renesas Electronics Corp., explained the company's strategy behind the acquisition of Nokia's modem business.

Akao called the Nokia deal "the offensive move," instrumental to the company's yet to be disclosed "100-day plan," which started in April when the Japanese company officially merged with NEC Electronics.

So-called "defensive moves" in the 100-day plan, expected to include aggressive measures to eliminate redundancies in technology roadmaps, product plans, business operations and resources at the combined company, will be disclosed July 29th when Renesas announces its quarterly financial results.

Although silent on most details in the 100-day plan, Akao stood by his promise of "making tough choices," during his interview. He added: "I am asking those who report to me to come up with a unified plan rather than a dual structure. If operations pursued by the two companies are similar, we must pick one."

Choosing one, however, is problematic particularly in the mobile platform field. Both old Renesas (pre-NEC Electronics merger) and NEC Electronics have been independently pursuing a variety of mobile platform development initiatives, alliances and projects with diverging roadmaps.

Although many analysts like Renesas' acquisition of Nokia's modem business, most remain cautious about end results.

Will Strauss, president of Forward Concepts (Tempe, Arizona) compared the Renesa/Nokia deal to the 2007 STMicroelectronics/Nokia deal, under which 200 Nokia engineers transferred to ST.

Strauss said, "Clearly, with 1,100 people being transferred to Renesas, this is a far bigger deal than the earlier STMicroelectronics deal. I think it's clear that Nokia wants out of the modem chip design business." He warned, however, even after this deal, "Nokia will still insist on multiple suppliers. And I don't see Nokia eliminating ST-Ericsson, Qualcomm, or Infineon (now, maybe Intel) as modem suppliers."

Akao, however, noted that Renesas already has a "business agreement" in place with Nokia, under which Renesas's first LTE/HPSA+ modem chipset, using technology licensed from Nokia, is promised a design win in "a certain Nokia handset model" scheduled for launch in the 2011 fourth quarter.

Renesas, meanwhile, will start sampling that LTE/HSPA+ chipset in the fourth quarter of 2010 and is scheduled for mass production in the second half of 2011.

Stilll, Byrne said it is uncertain how big a Renesas customer Nokia will be. He added, "As for other OEMs, they have a lot of choices for LTE modems, including not just major suppliers like ST-Ericsson and Qualcomm but also small companies that originally were targeting WiMax."

Akao said, "Of course we understand that. Unless we can offer our customers quality, cost and delivery in our products, we won't be able to compete. This is such a huge business; our customers shouldn't be bound to a single supplier."

On choosing IP cores

For now, Renesas' first LTE/HSPA+ modem chipset comes with no DSP. It is using Nokia-designed proprietary logics for LTE, in addition to ARM Cortex-R4 processor core for the modem.

Asked about the company's LET/HSPA+ modem ICs based on Nokia's technology, Renesas' Akao said, "We are neutral on the choice of IP cores. As long as they are highly efficient, and more or less standards-based, we think that's the way to go."

Moving forward, Akao said, "Together with Nokia's team, we will brush up, improve new versions and develop new platforms." He added that Rensas is hopeful in actively participating in the standardization process for the next-generation modem development after LTE.

While there are numerous options for LTE-baseband DSPs: an in-house design, Tensilica, Ceva, NXP, Blue Wonder, Cognovo, Coresonic, and Silicon Hive, "the options for Renesas are three-fold," explained Byrne.

"It's either switch to the DSP selected by Nokia; migrate Nokia's design to Renesas's DSP of choice; or to switch to a neutral DSP," he noted.

ST-Ericsson, for example, is migrating Ericsson's LTE design, which likely used Ceva DSP technology, to one based on a DSP originally from NXP, Byrne explained.

"My guess is that Renesas has Tensilica-based LTE hardware, owing to the success Tensilica has had with NTT Docomo. I have no sense of what DSP technology Nokia has been using in its LTE baseband modems."

Going beyond mobile phones

What matters in the upcoming LTE world is no longer limited to mobile handset design wins, said Akao.

LTE modems will be integrated into myriad Mobile Internet Devices 每 other than mobile handsets, Akao predicted, thus enabling ubiquitous high-speed data connections for almost any product. The LTE modem can serve as a catalyst for consumers' "cloud computing," he added.

Renesas estimates that as many as 280 million terminals will be integrated with LTE modems in 2012 alone. Roughly 50 percent will be e-readers, iPad-like devices and others 每 which are essentially non-cell phones.

Behind the company's LTE strategy, Renesas is committed to gaining a foothold in the growing wireless broadband infrastructure market.

Linley Group's Byrne said, "An important factor will be how much interoperability testing expertise Renesas gains" from this Nokia deal. The priority for Renesas is to develop LTE modems that "connect to the world," Akao agreed.

While some industry analysts asked why Renesas is venturing into a market as competitive and uncertain as mobile handsets, Akao explained, "Our focus is not limited to cell phones. We think this will be a far bigger market."

The road ahead

The bottom line is that the Nokia deal probably boosts Renesas's prospects, but also poses some major challenges.

Beyond all the competition Renesas must face, its biggest challenge might emerge from within.

On one hand, the company needs to rein in all the internal forces pitching different technologies for the company's new LTE business. Beyond that, there's the issue of riding herd on 1,100 Nokia engineers. "We need to make sure that they will be creating even better output than they were with Nokia," said Akao. "That means that Renesas will have to be in a much broader 'technology management' business, rather than in the business of 'semiconductor management,'" he stressed.

What still remains unclear, though, is how genuinely prepared Renesas is to whittle down its mobile platform development projects 每 modems and apps processors included 每 to a chosen few. For example, the Renesas/NEC merger already resulted in both duplication and divergence in solutions for 2G/3G modems and future LTE modem development.

Forward Concepts' Strauss explained that the old Renesas has "SH-Mobile G3, which began shipping in 2008, a single-chip baseband processor supporting transfer rates up to 7.2 Mbit/s (HSDPA Category 8) and an SH-Mobile (non-ARM) application processor." They sell primarily to Japanese handset suppliers (Fujitsu, Sharp, Sony-Ericsson), according to Strauss.

Meanwhile, Renesas separately announced teaming up with NTT Docomo and handset makers Fujitsu and Sharp to develop a fourth generation SH-Mobile G4 Com-Processor (baseband and application processor on a single die), said Strauss. "The 45 nm CMOS-chip will integrate dual-mode digital basebands, applications processor, graphics, imaging and multimedia IP," he added.

In contrast, NEC has a Medity family of com-modems (including application processor) that incorporates WCDMA and HSPA (software) technology developed by Adcore-Tech, a joint venture established by NEC, NEC Electronics and other handset and communications chip vendors.

Choices of DSP cores and processor cores possessed by the combined Renesas/NEC are numerous. These ranges from proprietary DSP and Tensilica RISC/DSP cores to ARM Cortex-A9 and Renesas' own SH.

Forward Concept's Strauss noted that in early 2009, in separate news releases, Fujitsu, NEC and Panasonic announced that they had licensed multiple Tensilica RISC/DSP cores to be employed in LTE cellphone baseband developments. "We understand that the ultimate baseband designs will employ between 6 and 8 Tensilica cores, each dedicated to specific LTE tasks," said Strauss. "Although there is no public announcement, we believe that the three Japanese companies are collaborating, as Japanese companies often do, likely in conjunction with NTT Docomo."

- EE Times

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