So why has Intel bought Infineon’s mobile phone chip business?
Intel’s $1.4bn acquisition of Infineon Technologies’wireless chip business may put the processor firm in the mobile phone chip market for the first time.
But it finds itself in an unusual position. Trailing in the wake of stronger and more established competitors, namely Qualcomm, MediaTek and ST-Ericsson.
Yet Infineon does have a strong baseband chipset business which could be well placed to take advantage of a change in the shape of the mobile phone chipset market.
The next big mobile phone battle ground will be the TD-SCDMA baseband market in China which will grow 200% this year.
Right now MediaTeka and ST-Ericsson are big suppliers in China, but Infineon is expected to enter the market by next year.
“Several new players – including Marvell, Qualcomm, MStar Semiconductor and Infineon - are expected to enter into the Chinese TD-SCDMA baseband market in 2010-11,” said Sravan Kundojjala, handset component analyst at Strategy Analytics.
It is likely that that battle will be influenced by a change of the fundamental design of mobile phones.
The value in most electronics systems comes from the software which runs on hardware platforms. Mobile phones have been slow to adapt to this trend, largely due to the cost and power constraints of handset design.
But the move to programmable platforms and what has become known as software-defined radio (SDR) architectures is expected to make an impact on the next generation of smartphones and China is where this will happen first.
Infineon is the mobile baseband chipset supplier which has most actively embraced the new SDR approach to mobile phone design. This was probably a big factor in Intel’s decision to pay $1.4bn for a business which is still outside the top four in the market.
The significance of the programmable approach to baseband design is that presents a problem for market leaders like Qualcomm and MediaTek which have built businesses based on standard chipsets.
These traditional hardwired chipset-based designs require multiple dedicated baseband modules, each targeting a different standard.
In the future, mobile phone basebands (the key digital radio circuits) are likely to be based on silicon IP embedded in to more integrated system-on-chip devices, which offer big power and cost savings.
“A software-based approach that offers multimode systems support and can replace multiple dedicated baseband systems seems to be the right direction. In addition, this rapid evolution requires a more efficient development process. Reusing the same platform over multiple product generations is essential,” says Eyal Bergman is director of product marketing at Ceva, which develops baseband IP for embedding in SoCs.
Interestingly, Infineon has had an SDR collaboration with Ceva for three years.
Earlier this year, it extended that relationship to include the dual MAC, 32-bit TeakLite-III DSP core for 4G mobile phone and modem platform solutions from Infineon.
The DSP core implements baseband and audio processing in mobile phones when integrated into system-on-chip devices.
According to Gideon Wertheizer, CEO of Ceva: “DSP plays an essential role in overall power consumption and performance in handsets.”
The dual-MAC, 32-bit processing architecture enables the core to reach operating speeds higher than 700MHz in a 65nm process.
The core is available with a range of optimised HD audio codecs supporting from 2 channels up to 7.1 channels with various bit-rates.
The level of processing performance required for running the SDR algorithms in next generation phone designs will require a communication-specific programmable approach can address these performance and flexibility challenges and enable efficient 4G modem designs.
“As we move to 4G, the cost of development and the changing standards increase the risk of a traditional, hardware-based design approach. This naturally leads to looking at a programmable multimode solution,” says Bergman.
See: 4G mobile designs call for programmable chips
Intel was running out of options as the technology and market drivers for microprocessors moved from PCs to mobiles.
It has recognised that to win more chip business with mobile phone manufacturers it needed a complete handset platform, not just the Atom processor.
The acquisition of Infineon may have had a degree of opportunism in it. But is it just possible that in doing so Intel has picked up a trump card in the shape of SDR with which to do battle with bigger rivals in the baseband market.
An attraction of Infineon is its use of DSP cores developed by Ceva. The DSP core implements baseband and audio processing in mobile phones when integrated into system-on-chip devices.
See: 4G to start to take off in 2012 - Juniper