TI是否继续统治基带芯片？

Jolted by some unforeseen competitive and supply chain forces, Texas Instruments Inc. is gradually losing market share in its bread-and-butter wireless baseband chip business.

Some observers suggest that TI will rebound and remain a major player, but others believe the chipmaker’s glory days are over in the wireless baseband arena. Still others wonder whether the company’s pending chip announcements and new fab strategies are too little, too late to regain its footing in the segment.

Going into 2008, the big question is whether TI can regain lost momentum in baseband chips or whether it will continue to decline. Another related issue is just how far TI will move down the fab-lite and foundry path for logic circuits, which include baseband chips. That, in turn, could help determine whether the chipmaker will sell its new but empty 300mm fab in Richardson, Texas.

For now, TI remains the world’s largest supplier of baseband chips (which are sometimes called cellular phone chipsets). "Baseband chip" is a generic term that describes the central controller or application processor that handles most of the digital functions in a handset.

After years of market dominance, TI’s baseband chip efforts are "in flux," said Will Strauss, president of Forward Concepts Co. The competition continues to "chip away at TI" and its baseband share, but Strauss contends that the "party is still not over" for the company.

Still, TI faced heavy competition in the baseband market during 2007. The company lost its monopoly position in the baseband at three major accounts: Ericsson, Nokia and NTT. And this year, the competition is expected to be just as fierce.

Nokia, one of TI’s largest wireless IC customers, moved to a multisource baseband chip strategy to reduce its supply chain risks. Nokia will continue to use TI’s devices, but the cellphone giant will also source chipsets from Broadcom Corp., Infineon Technologies and STMicroelectronics.

TI is projected to gain market share from chip sales to struggling Motorola Inc., but it’s unlikely those gains will make up the difference.

In 2006, TI held a commanding 42 percent share of the wireless baseband business, according to Forward Concepts. The next largest competitor was Qualcomm Inc., which accounted for about 25 percent.

In preliminary estimates, TI’s baseband share is projected to have slipped to 40 percent in 2007, while Qualcomm’s share is believed to have risen to 30 percent, Strauss said.

Another emerging rival is Taiwan’s MediaTek Inc., which Strauss said has been just plain "scary" in the way it has clobbered TI and other competitors in China.

Going forward, the baseband market is up for grabs. "I believe the tipping point continues to be technology-based, with many new [wireless] standards in development," said Doug Freedman, an analyst with American Technology Research Inc. "Picking the right solution road map is likely to determine the next share shift."

As a result of these and other trends, many ask: Can TI fend off the baseband competition and rebound in 2008?

The strategy
On the one hand, TI in 2008 is poised to make a renewed assault on competitors, especially its pesky fabless rivals Broadcom, MediaTek and Qualcomm. Several IDMs, such as Freescale, Infineon, NEC, NXP and STMicroelectronics, also compete in the baseband chip market.

TI is fighting back by readying a new chip line, evolving its "hybrid" or fab-lite manufacturing strategy and shifting to a new R&D model. Some of the moves are intended to reduce manufacturing costs and make the company a more nimble competitor.

In addition, TI appears to have changed its strategic tune in logic (including baseband devices). At one time, the chipmaker bragged about its advanced logic fabs and processes. But now, it talks less about processes and more about design. Indeed, TI is beginning to sound more like a fabless vendor than an IDM.

On the design front, TI executives have hinted about a new 45nm product line, though the company has yet to announce a device. TI also has updated its hybrid manufacturing strategy and outlined a controversial new R&D model.

TI has followed a hybrid strategy for logic and digital devices for years, leveraging capacity from its own fabs and various silicon foundries. (In analog, the company continues to invest in its own fabs and processes. It is the world’s largest analog chipmaker.)

TI continues to build baseband devices and other IC products within its own fabs, but the company also uses several foundries to make its wireless devices. At the 65nm node, TI exclusively develops processes and makes its own high-performance DSPs. But at 45nm, the company and foundry Taiwan Semiconductor Manufacturing Co. Ltd (TSMC) will both manufacture TI’s DSPs.

TI has long prided itself on its in-house development capabilities for advanced logic processes, as well as on its captive fabs, claiming the capabilities have given it an edge over its fabless rivals. But recently, the foundries have caught up with—or even surpassed—many IDMs in the process race. That has allowed Qualcomm and other fabless baseband vendors to close the process gap with TI.

Rumors are also running rampant that United Microelectronics Corp. (UMC) gives special, low wafer pricing to MediaTek, a spin-off of UMC. (Ironically, TI uses many of the same foundries—including Chartered, TSMC and UMC—as its fabless rivals.)

As the foundries close the process gap, the name of the game has changed in the wireless chip segment, said Bill Krenik, chief technology officer in the Wireless Terminals Business Unit at TI. The once-secret sauce of process technology will become more of a commodity and "less of a differentiating factor" not just for TI, but for the wireless chip industry as a whole, Krenik said.

The real keys, he said, are within the design itself and the ability to harness several capabilities, such as low-power and integration. For example, TI’s single-chip cellphone, LoCosto, leverages the company’s proprietary DRP digital RF processor technology to integrate the RF transceiver and analog codec with the digital baseband. TI also makes use of SmartReflex, a technology said to control voltage, frequency and power, in its wireless offerings.

With those technologies in hand, TI dismisses the notion that it is behind the curve or is losing share. For example, Qualcomm recently claimed to have taped out a 45nm baseband design at foundry partner TSMC, but TI is already sampling an undisclosed part at the 45nm node, with qualification slated for mid-2008, Krenik said.

As for the dynamics of the baseband market, "there has always been a lot of competition," he said. "There are times when we gain share, and there are times when others gain share on us."

Beyond 45nm, TI is moving into some uncharted waters in logic. Last year, it stunned the market by announcing plans to shift its digital R&D from inside the company to foundry partner TSMC starting at the 32nm node. According to Gartner Inc., TI is moving toward a process-lite strategy, which is aimed at reducing risk as well as costs.

But some observers believe the strategy itself is risky, since TI is handing over its prized process, and perhaps its future, to TSMC.

Fab for sale?
The TI-TSMC announcement has fueled endless speculation about the fate of TI’s RFab, a 300mm wafer facility in Richardson.

When TI announced the fab in the early part of the last decade, the company thought it would need to control the bulk of its own logic (and baseband) capacity in-house. At the time, the foundries were behind the technology curve, and TI seemed to have an endless stream of capital for wafer fabs.

That IDM mentality is long gone at TI. The company has built the shell of the RFAB, but it has not said when it might equip the plant. Given TI’s fab-lite thrust, Strauss said there are ongoing "rumors" that TI will eventually sell the RFAB.

IM Flash, Micron and Samsung have looked at the fab thus far, sources said.

Still others believe the company will turn the plant into a giant analog fab. And indeed, after preaching the DSP mantra for several years, TI has made it no secret that its future success revolves around analog.

The question is, what will TI do when analog margins begin to erode or when that market becomes passé?

- Mark LaPedus
EE Times