Texas Instruments' all-in-one chip could halve handset cost

Texas Instruments will soon ship a new all-in-one chip for low-end mobile phones to customers, much of it developed at the semiconductor chip maker's Bangalore development centre, sources in the company said.

The new chip is one of a group of chips called Omap Vox, the first of which was globally released on Monday, combining a modem and a processor on a single piece of silicon capable of running 30-frames-per-second video on hi-end phones.

While Monday's release was for fancier phones, the made-in-Bangalore chip "targets the low and entry level handsets where the volumes are." Such chips "could reduce their costs by up to 50 per cent. Phones that you are buying today at say Rs 3,500 could be available for Rs 1,500 to Rs 2,000."

Customers of the chip maker include major cellular phone makers, who "from then on should be able to bring out mobile phone handsets based on the new chip in under a year's time." This chip willd be aimed at the booming cell phone market in India and China, and could contribute to more people going mobile, sources said.

TI's "open media application platform (Omap)" family of chips combines tasks orginally done by more than one chip. Omap chips achieve finer features via greater integration "" for instance, by putting both a general purpose processor and a reduced information set processor, which is a lower powered processor, together.

The all-in-one chip combines three of four different functions, now done by different processors.

The chips needed include the main digital signal processor that allows a phone to talk to the rest of a mobile phone network, a chip for interfacing, needed for instance to decide how text or numbers are displayed on the phone's screen, a radio frequency chip and one for power management.

"While the technology exists to put all of them together, we find it more efficient to combine the functions of the first three in one chip, and keep the power management separate."

This will inevitably make the phone smaller and reduce manufacturing costs.

There will also be reduced lengths of wires in the circuits, so decreased power consumption. In an earlier interview, Ray Simar, a TI Fellow told this correspondent, "Omap is the beginning of a trend."

Company sources here said, the Omap family of chips could also grow into multi-billion dollar revenues for the company. For the year to December 2004, revenues from sales of these chips was some US $450 million.

This year, "we expect it will be around $550 million, but soon it will cross the billion mark as more applications are found for the chips, and device makers adopt them."

There is no derth of applications or devices that use them. Companies such as Hewlett Packard, Kodak and Sony already use one or the other Omap chip, the first two on digital cameras and the last on its playstation.

Small specialist firms here have also found business opportunities in building "reference platforms" around TI's chips.

A reference platform is a combination of software programmes and semiconductor chips, architechted to work as, say, a cell phone or a PDA (personal digital assistant).

Some of those firms have even become Omap Centres of Excellence churning out applications for the chips, which the original equipment makers, such as the cell phone manufacturers, will be interested in.

TI is one of four companies dominating the general purpose digital signal processor (DSP) segment. A large chunk of it is accounted for by exploding volumes in cellular phones, boosting the market to nearly $10 billion this year, market watchers say.

This, together with embedded DSP, with software burnt into semiconductor chips to run devices such as DVD players and Internet video phones, makes up a market of some $25 billion worldwide.