July 5, 2010
By Michelle Donegan
No shortage of silicon will thwart mobile operators’ Long Term Evolution (LTE) deployment plans, but established chipset vendors face challenges from new contenders in this dynamic components market, according to a new Heavy Reading report.
The report, “LTE Chip Makers Ramp Up Production to Meet Demand,” finds that the market leaders in baseband and radio frequency (RF) chips are fending off new competition from startups targeting the LTE market as well as from WiMax silicon suppliers that are shifting to LTE. (See Chipping Away at LTE and The Chips Are Up for LTE.)
Along with the emergence of new players in the market, silicon suppliers for base stations, customer premises equipment (CPE), and devices are also under pressure from the challenges that LTE presents, including support for myriad frequency bands and “a complex mix of networks, bandwidth, and performance.” Chip vendors will have to develop flexible and highly integrated devices that are also cost effective and power efficient to meet the challenges of the next-generation mobile broadband technology.
“If the established vendors are slow in delivering fully functional multimode devices there will be significant opportunities for Tier 2 vendors that have established credibility in either the HSPA [high-speed packet access] or WiMax markets,” writes analyst Simon Stanley, author of the report.
Since LTE base stations are expected to be much smaller than 3G macro base stations — with micro base stations that support up to 600 users likely to be the norm — silicon vendors like Texas Instruments Inc. (NYSE: TXN) and Freescale Semiconductor Inc. face competition from alternative base station designs that integrate micro, pico, and femto-sized cells. Challengers in this space include DesignArt Networks , Mindspeed Technologies Inc. (Nasdaq: MSPD), Picochip , and Wintegra Inc.
(See Mindspeed LTE Chips Go to Vegas, DesignArt Boosts 4G SoCs, picoChip Scores $20M, Ships 1M Chips , Wintegra Tries This IPO Thing Again, and Multicore Processors Target LTE .)
For LTE terminals and CPE, chips for USB dongles are first on the market. While TeliaSonera AB (Nasdaq: TLSN) has just started offering a multimode dongle from Samsung Corp. that supports GSM and HSPA, as well as LTE, most chips for multimode dongles will start shipping from 2011, according to the Heavy Reading report. (See TeliaSonera Beefs Up 4G Dongles .)
The report notes that Qualcomm Inc. (Nasdaq: QCOM) and ST-Ericsson are well placed to meet the demand from volume handset and device manufacturers. But competitors include Altair Semiconductor , Beceem Communications Inc. , Icera Inc. , Sequans Communications , and Wavesat Inc. , as well as LG Electronics Inc. (London: LGLD; Korea: 6657.KS) and Samsung, which have developed their own chips in-house.
(See Altair Offers LTE Radio Chip, Beceem Powers Open Range Devices, Icera Demos LTE/HSPA Modem, Sequans to Sample LTE Chip, and Wavesat, picoChip Demo LTE.)
The report also analyzes RF transceiver suppliers such as Analog Devices Inc. (NYSE: ADI), BitWave Semiconductor Inc. , Fujitsu Microelectronics America Inc. , Infineon Technologies AG (NYSE/Frankfurt: IFX), and Lime Microsystems .