How many employees does it take to run a mobile chip company these days?
As the mobile chip business transforms from components to a full
platform business, “Our customers – handset vendors – do expect a lot
from us,” said Finbarr Moynihan, MediaTek’s general manager, business
"Full platform" means that chip vendors provide not just
working modem chips but also protocol stacks to go with every flavor of
modem standards, RF and power management solutions, CPU, GPU, media
processing and all the connectivity elements. Beyond chip technology
development, these mobile silicon vendors are also "expected to do full
Android software development," Moynihan added. To pull together all
these developments, the idea of a mobile chip company with 4,000 or more
employees seems less outrageous.
Of course, the financial
community might find it reasonable for MediaTek -- whose mobile chip
business happens to be performing well this year, especially in the
smartphone IC market in Asia – to keep that many employees. By the same
token, they might be less tolerant of such profligacy at ST-Ericsson and
A cautionary note: When you
strip a mobile chip company’s engineering team to the bone, you aren’t
just cutting cost. You’re likely taking away the tools the team needs
to compete in global markets.
No wonder Texas Instruments
chose to flee the mobile business. So did Analog Devices (its former
modem team is now a part of MediaTek), Infineon (whose mobile business
was acquired by Intel) and Freescale Semiconductor. It will be no
surprise if STMicroelectronics adds itself to this list.
clear that electing to stay in the price-competitive global mobile chip
business isn’t for the faint-hearted. The question is: Beyond Qualcomm
and Samsung, who else can remain in the business for the long haul.
Intel probably can.
For MediaTek, as it stands today, the answer is
As the cost of supporting all aspects of the mobile
business continues to pile onto the shoulders of chip companies trying
to sustain 4,000 to 5,000 people in a low, low margin business, something’s gotta to give.