TI calls baseband a distraction, but is it?

November 11, 2011 // Sylvie Barak

While Texas Instruments pushes forward quickly and aggressively with its OMAP mobile processor, some still wonder whether the firm's “strategic decision” to leave out baseband could come back to bite it.

While competing silicon vendors have rushed to integrate baseband onto their chips, TI has shied away from doing so, calling it a mere “distraction” and proclaiming itself glad to no longer be dealing with the connectivity side of the business.

“TI made a strategic decision in 2008 to phase out of the baseband segment and focus on two key Wireless growth areas: OMAP processors and wireless connectivity solutions,” said the firm’s Director of Strategic Marketing Avner Goren when confronted with the question.

“We continue to see proof that this was the right decision, especially as multimedia capabilities are innovating at twice the pace of access technology,” he said adding that this was especially true with the sheer pace of innovation in the industry, which he claimed mandated a more discrete approach in order to facilitate faster time-to-market.

Indeed, while new application processors tend to tape out every 9-12 months, new modems are on a slower cycle of 12-18 months, though LTE-Advanced may close the gap a little. Currently, however, this is typically the reason argued for keeping modems and processors on separate dice.

On the other hand, mobile chip giant Qualcomm, which does integrate modems onto its Snapdragon processors, has managed to keep pace with its rivals, largely debunking the naysayers.

Instead of integrating its own baseband technology, TI says it supports a range of access technologies which Goren claims allows the firm to integrate its platform with multiple standards from modem suppliers or OEMs with proprietary offerings.

Goren added that TI was also pushing chip-to-chip (C2C) interface technology which allows the removal of the modem DDR, purportedly resulting in memory cost and PCB footprint savings.

“We license C2C to major modem vendors, and have partnered with Arteris to widely deploy it,” he said, noting that TI had also actively supported the MIPI Alliance’s standardization of the Low Latency Interface (LLI), targeted for OMAP 5 integration.

While Goren’s defense seems solid on the surface, however, analysts in the space have cast doubt over TI’s dismissal of baseband.

Analyst Will Strauss of Forward Concepts believes Goren is simply “towing the party line,” and that while it’s certainly true that modems and application processors are on different road maps, integration of the two is a growing trend, especially in terms of cheaper, lower-end phones.

Analyst Jim McGregor of In-Stat agreed, saying that not only would it be cheaper and less of a battery drain, but that Moore’s law actually facilitated it.

“TI’s argument doesn’t hold water, because it’s not a question of ‘if’ baseband should be integrated onto the chip, but when,” said McGregor adding, “if you’re going to be playing in the smartphone market, you need baseband.”

While it’s true that some devices don’t necessarily need cellular connectivity today, McGregor posited that as carriers began to think more in the direction of pooled data plans to connect up all of a person’s devices, that tenet would become less true.

“There will always be room for a stand-alone OMAP4 or 5, but the number of stand-alone sockets will likely not grow as fast as the integrated pair numbers,” agreed Strauss, adding that while the integration trend lay more at the low-end of the smartphone spectrum, Qualcomm's Snapdragon S4 processor with inbuilt LTE modem would more than match up to OMAP5-level capability.

“No matter how good OMAP is, there will always be competitors that are in the same "horsepower" category on the same die with the modem,” Strauss said.

Interestingly, said Strauss, the "modem being a distraction" was Intel's mantra back when the firm was pushing StrongArm apps processors with a modem acquired from DSP Communications. When this initiative failed, after a billion dollars or so worth of investment, Intel sold the pair to Marvell for $600 million - a fraction of the $1.7 billion it had acquired DSPC for.

Seeming to regret that decision several years later, Intel bought Infineon's wireless business for $1.4 billion last year.

Similarly, Nvidia paid $367 million for modem chipset maker Icera, A UK based firm with more than 550 patents granted or pending, and product approval from over 50 carriers across the globe, while Renesas acquired Nokia’s baseband technology, saying it planned a major thrust into the LTE market.

The market for baseband processors is one of the fastest growing segments of the technology industry, worth an estimated $15 billion a year, according to market watchers.

“TI could always partner up with a player like Mediatek, or one of the big Asian carriers who has patents in the area - like Japanese NTT Docomo - but the market for acquisitions is getting pretty slim,” said McGregor explaining that after the major acquisition spree last year, most remaining baseband chip makers had been snapped up. “The only one possibly left is Sequans,” he said.

“Then again, there’s going to be some sort of fallout in the mobile market over the next couple of years,” said McGregor. “There are currently 24 vendors targeting handsets and there’s only really room for about 4. When that consolidation happens, there will be assets up for grabs,” he said.

Thus, while TI is certainly moving forward very competitively with Omap, and will be first to market with an A15 chip targeting the high-end where baseband integration is currently less important, the firm may have to re-evaluate as the lower-end integration trend comes more into play. Especially as combo chips like Qualcomm’s upcoming 8960 make their way to market sporting not just 3G but TDD FDD LTE, wifi and Bluetooth to boot.

“It’s certainly going to make things harder for TI, not having baseband going forward, because it is a differentiator for handsets,” McGregor concluded.

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