BRISTOL, England — Icera Inc., a venture capital backed fabless chip company with a chipset and software modem for high-speed packet access (HSPA), has delayed a planned initial public offering of shares until about 2010, while it plans to raise more private money to fund its push into the Long-Term Evolution communications standard.

Nigel Toon, vice president of marketing at Icera, confirmed the plan but declined to say how much Icera was looking to raise. Some sources have put the amount as high as $100 million which would make Icera one of the most heavily funded fabless semiconductor startups ever.

"We were thinking of an IPO in 2009. With LTE coming down the pike we will likely delay the IPO until 2010 and raise some more money privately. We know some people * financial institutions and strategic investors * who've shown an interest to do that with us. It will allow us to address coming standards at a more aggressive pace," said Toon.

Icera, founded in 2002, has already raised $142 million and the company diluted its venture capitalists' position when it wrote paper to fund the acquisition of Sirific Wireless Inc. (Waterloo, Canada) in April. The nominal value of the deal has not been revealed. Sirific itself had raised $63 million prior to acquisition giving the enlarged Icera a VC tally of $205 million and a head count of 260 people.

Such a head count means that Icera, which so far has only penetrated the HSPA data card market, is burning cash. Without an IPO in sight Icera needs to raise money and at $300 million the exit of five to ten times investment that VCs have traditionally sought could only be achieved by an IPO raising $1.5 billion or more.

Toon insisted that Icera is well placed to achieve such an IPO. Although Icera only began shipping its silicon for the 3G broadband card business last year it believes it is ahead of the competition technically, including Qualcomm Inc., the only other chip vendor supplying HSPA silicon at present, he said. "The card market went from 5 million units in 2006 to 20 million units in 2007 and we are looking at 45 to 50 million units in 2008," said Toon. While admitting that Qualcomm had almost all of that market in 2007 Toon asserted that according to sources Qualcomm did $350 million worth of business in the card market alone.

"If the card market doubles in 2008 and we get a few percent its excellent business, and that's before we even start shipping in mobile phones," Toon added. Stan Boland, founder and CEO of Icera, has been reported saying he is aiming to get one third of the global data card market by the end of 2009, which could give Icera hundreds of millions of dollars in revenue. "We are moving into revenue and we expect to be cash positive in the second half of 2009." This is also the time when Toon expects the first Icera silicon to start showing up in mobile phones.

The advantages that Toon said he sees for Icera increase as the mobile market moves towards smartphones and LTE because of the software-programmable architecture that the company as adopted.

"Our move to LTE is simpler and more efficient because we are doing it in software. We will use the same transistors to run LTE as we do to run 2G and 3G, said Steve Allpress, chief technology officer of Icera. "And the ability to use the same silicon as calls are migrated from 2G to 3G to LTE is efficient.

Some handset vendors may try to "freeze" their 3G designs and then add LTE silicon alongside it but this will be an expensive way to produce a handset for what is, at least initially, going to be an infrequently available service, Toon and Allpress argued. "When LTE rolls out it will be spotty coverage," said Allpress.

Icera also expects to realize a power efficiency advantage. Usually non-programmable hardware-accelerated designs offer the most power efficient approach to applications and software-programmability carries a power efficiency penalty. But Icera has gone to great trouble to allow sections of its baseband to be switched off and on as required. As the processing tends more to streaming data the DXP processor at the heart of Livanto does progressively better than hardwired solutions.

"For a simple 2G voice call we might show a slight premium," said Toon before adding that for the HSPA application the company's silicon has a power-efficiency lead at 65-nm, which will be heightened with moves to LTE and to finer geometries.

Allpress added that the basic DXP architecture is suited to LTE. While It might be tweaked with a move to 45-nm the fundamental architecture can scale internally, or Icera could double up the basebands for a dual-core type architecture, and probably still implement in less die area than the competition, he said.

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