It’s All About Integration

The new message in China is integration, and that message is being spun and re-spun as companies jockey for position in a converged consumer world.

Case in point: When Frank Liang, Broadcom’s general manager for Greater China, released a 65nm chip that included Bluetooth, FM radio and GPS functionality two months ago, it hardly seemed like a major innovation. Texas Instruments and Cambridge Silicon Radio introduced a similar chip 10 months earlier. But as Liang put it, it’s not the time of releasing but integration quality that counts.

Integration is Broadcom’s favorite topic these days, and with good reason. According to IDC’s latest statistics, combination chips will account for half of the market by next year. Companies with stronger abilities to integrate technologies and tackle interference issues when those functions are combined will win the market.

Within two years, all mainstream mobile phones will be embedded with GPS, triggering plenty of new opportunities for service providers, media and advertising. It’s no wonder that wireless chip vendors at the upper stream of the industry chain such as TI, CSR, Broadcom, Atheros and NXP are jockeying for position in this market.

The trend for “omnipotent” mobile phones also presents enormous opportunities and challenges for chip providers. Everyone sees the cake but not everyone can eat it. To make sure they’re in line, many companies are accelerating their acquisition plans so they can include more functions on chips more quickly. Despite clear signals that this was where the market was heading, Broadcom didn’t make a significant move in this direction until 2007 when it acquired Global Locate, then the world’s second largest GPS chip provider. Global Locate boasts leading GPS chip IP and powerful network- assisted GPS. Not surprisingly, that technology is in Broadcom’s new chip.

CSR, meanwhile, acquired Sirf Technology Holdings in February for the much the same reason. Interestingly, Sirf posted losses as an independent company, despite the growing popularity of GPS technology.

More integration ahead

Broadcom once claimed that it would release a new chip every two months. The product roadmap displayed by Broadcom when it introduced its new chip in February showed the new selling point will be WLAN connectivity. Questioned about this direction, Liang responded, “It’s good reasoning.”

There is widespread speculation in China that telecom operators will actively deploy “3G+WiFi.” 3G is used for the wireless communication in remote areas and between cities, while WiFi is the wireless Internet model of the highest price/performance within cities. Simultaneously supporting 3G, WiFi, Bluetooth and GPS is already a burgeoning trend. Broadcom, which is second only to Qualcomm as the 3G (WCDMA) solution provider, not to mention supplier for Nokia and Samsung, market watchers don’t expect to be kept waiting very long.

Scott McGregor, president and CEO of Broadcom, said his company is no longer a simple baseband chip provider, but a mobile phone chip provider. The difference is all about integration.

Xioadan Wang is chief editor of EEFocus, the Chinese affiliate of Low-Power Design and System- Level Design. Prior to funding EEFOCUS, Xiaodan was the Online Publishing Director and Chief Editor at Electronics Business China for 2 years. From 1999-2003, she held the position as journalist of Phoenix Weekly and New Express Daily. Xiaodan has a B.S. in Journalism and Mass Communication from Nanjing University.