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ST hinges future on 'big-chip-in-the-middle' strategy

Posted: 24 May 2011 ?? ?Print Version ?Bookmark and Share

Keywords:big chips? platform? applications processor?

From components to pre-integrated 'platform' chips
Samsung already became the first customer for ST-Ericsson's advanced Thor modem chip. The Korean giant designed it into its Galaxy 4Gthe first HSPA+ 4G smartphone capable of theoretical peak download speeds of up to 21Mbps. Without naming names, Delfassy said, "There are more customers."

Meanwhile, for ST-Ericsson's dual-core U8500 single-chip modem/apps processor (Nova Thor), scheduled for launch in the second half of this year, ST-Ericsson has already signed up five customers, according to Delfassy. One of them is Nokia, he revealed.

ST-Ericsson calls Thor the industry's most advanced multimode modem solution (LTE, FDD/TDD, HSPA+, TD, 3G, 2G) available for handsets today, thanks to a number of modem-related intellectual properties the company amassed from its joint venture partners.

In 2009, ST-Ericsson was saddled with "six different flavors of" legacy modems (one from NXP; another from what ST acquired from Nokia; and three from former Ericsson Mobile Platform), according to Delfassy. While too many IPs could be seen as a good problem to have, it has taken ST-Ericsson almost two years to sort out its embarrassment of riches, settle on what they like, and finally succeed in improving its operational efficiency.

Delfassy explained that Ericsson's engineering team took a leadership role, complemented its modem technology with NXP's Vector processor whose architecture the team found "very clean."

While the so-called "platform strategy" has long been a mantra among many mobile chip suppliers, only in the last year have "many OEMs begun changing their behavior from buying components [from several suppliers] to pre-integrated 'platform' chips from a single source," explained Delfassy.

Pointing out that such a consolidation reinforces and validates ST-Ericsson's thesis on "a complete platform approach," Delfassy said most of its competitors have been scrambling for M&A or "shopping around" IPs for connectivity, modems and others.

A flurry of such activities in recent months ranges from Intel's purchase of Infineon's modem, Nvidia's Icera acquisition to Broadcom's takeover of Beceem and Qualcomm's purchase of Atheros for connectivity.

While the mobile chip market remains cutthroat, Delfassy noted that it will be "a challenge" for its competitors to integrate newly purchased IPs. In contrast, at ST-Ericsson, "We've just been through that," said Delfassy.

In summary, although the near-term financial situation deteriorated further in recent months due to the steep decline of ST-Ericsson's legacy and the uncertainty of Nokia, one of its biggest customers, Delfassy noted that "seven out of nine top handset vendors (in value, rather than in volume) are engaged with us." He added, "There are a lot of reasons to believe in a great recovery soon."

- Junko Yoshida
??EE Times

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