Icera Semiconductor, the wireless baseband start-up, may take another three years to become profitable as it works on migrating its chips to 40nm, but it doesn't need design-wins in the hand-set market to achieve a satisfactory IPO.

"It will probably be two to three years before revenues match burn-rate", Knowles told last week's Silicon South-West Wireless 2.0 conference in Bristol. Icera has raised $142m so far and is looking for another $60m this year.

The burn-rate is $200,000 to $300,000 per person per year and currently Icera has 260 people. "All our costs are people costs", according to Knowles.

So far, Icera has concentrated on the datacard market rather than the handset market. "Most start-ups try and out-engineer the incumbents", said Knowles, "and there's no obvious case for 7.2Mbps HSDPA and 5.7 Mbps HSUPA in a cellphone. There is in a laptop."

Asked if Icera needed to win a Nokia socket to IPO, Knowles replied: "200m laptops are sold every year. That's plenty enough for us to go public on."

However Icera is not ignoring hand-sets. "We're not doing nothing in phones, we do have projects with partners which are phone-centric," he said.

Not only is Icera the only company, besides Qualcomm, selling both 7.2 and 5.7Mbps HSDPA and HSUPA chip-sets, it is also the first to produce a soft modem.

"Bristol is the best place in the world to do this because of its long track record of designing soft platforms", said Knowles pointing out that Inmos' Chameleon was the first soft MPEG decoder in 1997, Element 14 developed the first soft DSL terminal chip in 2002, picoChip produced the first soft 3G/Wimax infrastructure chip in 2005, and Icera produced the first soft 3G terminal modem chip-set in 2007.

Knowles showed the Bristol audience the Roll of Failure of those which had tried to produce a soft modem and the amount of money spent in the attempt:

Morphics $60m, Chameleon $70m, Quicksilver $84m, SandBridge $60m, Systemonic/NXP is still live but in the R&D stage.

"Icera has the only commercial soft platform," said Knowles, joking, "maybe because it has raised the most money compared to anyone else."

There are several benefits of a soft modem. "The die size is very small, half the size of the nearest competitor, and therefore cheaper", said Knowles, "if you're half the size you're half the price."

Then there's power. According to Icera's CTO, Steve Allpress, "0.75mA is the average current for Livanto (Icera's baseband chip-set) whereas most competitors are 2mA."

A third advantage is inexpensive upgradability. "Performance upgrades are done by a software update, there's no need to re-spin the silicon", said Allpress, adding, "that allows us to stay ahead quicker, because we are able to prototype systems on our existing generation of silicon which competitors can't do."

Icera is currently working on migrating its chips from its current 65nm process to 40nm. "We're currently working on 40nm where a mask-set costs $2m", said Knowles, "if you make a mistake, you pay it again."

Fortunately for Icera, Knowles has the reputation in the semiconductor industry of never having had a chip he has made re-spun.

Knowles pointed out that, nowadays, it is not enough to make a baseband or an RF front end, you have to make the whole solution.

"We have a digital baseband, analogue baseband, radio, and power management. They are four different pieces of silicon. They require completely different design skill-sets," said Knowles, "you have to have digital CMOS design, radio design, power design and DSP. You've got to sell everything because no one else is selling part of the solution."

Icera's total solution is a cellular modem. "It measures a little over a square inch and costs less than $50 to make", said Knowles, "data transfer rates in both directions are a lot better than DSL connectivity."

At the heart of Livanto is a unique microprocessor which Icera calls its Deep Execution Processor (DXP).

"Livanto's baseband Deep Execution Processor is very different to any other processor", said Knowles, "it's good at wireless signal processing. It can do any air interface - CDMA, Wimax, 2G, 3G, anything. It delivers 20bn DSP operations per second. LTE raises the processing requirement to 50 DSP operations per second and we can still do it with one DXP processor."

Icera has a Qualcomm licence for CDMA and so can, theoretically, make a chip for any socket which Qualcomm addresses.

So Icera is launching onto a stormy sea. Its rivals are companies like Qualcomm (which spends $1bn a year on R&D), and Texas Instruments, Infineon, ST-NXP Freescale and Mediatek (which are each said to spend around $500m a year on wireless R&D).

"There's only one baseband silicon start-up and that's Icera", said Knowles, "everyone else is enormous. IPR licensing is very difficult. Anyone who doesn't own IPR pays a tax. A new entrant has to develop some IPR."

Icera has done that. It has filed for 120 patents. Asked how Icera can keep up with the huge spending of its rivals, Knowles replied: "Because we're a small company we are more efficient. I spent ten years working at ST, and have no doubt they will spend more money to do something than we will spend to do it."

See also: Mannerisms, the blog of David Manners. Updated twice daily, it's the distinctive, entertaining, authoritative and never dull commentary on the semiconductor industry, from someone who knows. Sign up for the Mannerisms eNewsletter.