Taking a page from a decade-old game plan executed successfully by Microchip Technology Inc., start-up Cygnal Integrated Products Inc. is trying to muscle its way into the ranks of 8-bit microcontroller suppliers by fusing low-end MCUs with high levels of analog integration.
While the effort is winning Cygnal early recognition, some analysts say it is too early to draw comparisons with the world's No. 2 maker of 8-bit MCUs. Still, Derrell Coker, Cygnal's president and chief executive, is unfazed and said his company is committed to exploiting the same blueprint that propelled Microchip to early success.
"We've been called Microchip on steroids," Coker said last week at the Silicon Hills Summit held here. "We've been able to go at this problem [of MCU and analog integration] with a clean sheet of paper and do it right the first time.
"I wouldn't say [other MCU vendors] don't have the talent, or don't have the wherewithal, but they have to work with their legacy products and legacy IP, and that makes it hard for them to do an effective job," he said.
Founded in Austin, Texas, in 1999 by Coker, a former Benchmarq Microelectronics Corp. executive, and with funding from Austin Ventures and others, Cygnal designs MCUs based on the industry's venerable 8051 core. The company said its eventual claim to fame will be what it believes is unparalleled levels of on-chip analog and mixed-signal integration.
Just as Microchip burst on the scene in the early 1990s with a new 8-bit MCU portfolio, Cygnal said it, too, expects to build its business quickly. Last year, Cygnal had revenue of just $1.5 million, but Coker expects that to increase to about $6 million this year and to more than $50 million in 2004.
Attacking the low end
Similar to Microchip's early strategy, Cygnal is attacking the low end of the 8-bit MCU market and has been flooding potential customers with developer kits it said will help drive its revenue gains in coming years.
Coker said the company has sold more than 7,000 kits, and has more than 1,000 customer designs in progress. The promise of integrating the 8051 core with data converters, sensors, buses, flash memory, and other previously discrete components will earn the company additional design wins, he said.
Some early engagements have included applications such as battery management, dense wavelength division multiplexing, headset displays, bar-code readers, gas-leak detectors, and smart sensors.
In addition to winning sockets from MCU suppliers like Microchip and Texas Instruments Inc., Coker said Cygnal is looking to steal the wind from analog suppliers such as Analog Devices, Linear Technology, and Maxim. Coker said he has identified more than $1 billion worth of potential business Cygnal could win that is currently being addressed by those five companies.
"They do seem to have some products others can't match," said Tom Starnes, an analyst at Gartner Dataquest in Austin. "The ability to integrate analog with an MCU is something that's not easy to do, and it has given them a good head start. The question is whether they can keep it up, because you've got companies like Microchip and TI that are continuing their efforts in analog integration."
Microchip rings in
Ganesh Moorthy, vice president of Microchip's Advanced Microcontroller and Automotive Division, Chandler, Ariz., said the company has "recognized the need for incorporating cost-effective analog peripherals on-chip, and has been delivering PICmicro mixed-signal MCUs for many years. Cygnal addresses the needs of the 8051 installed base, similar to what many other semiconductor manufacturers have been trying to do."
Coker said Microchip has gone full circle in its analog efforts, originally looking to provide integrated solutions, and more recently stepping back to provide a line of discrete analog components. He also said the low-end MCU market has been ignored by the start-up community over the past decade, with more attention placed on markets like DSP and 32-bit embedded processors.
"This is a market that most companies decided to leave as status quo," he said. "But anyone who really knows this market, like Microchip, knows it continues to grow. We believe there are innovative things we can do within an established standard that other people aren't even thinking about."
Cost problem ahead?
Cygnal, a fabless supplier, uses Taiwan Semiconductor Manufacturing Co. Ltd. as its primary foundry partner. That represents a problematic distinction between the company and the manufacturing model employed by Microchip, Dataquest's Starnes said.
"Microchip in the early days was able to use its older in-house fabs because they were good enough for this market," he said. "That enabled them to keep their costs very low. Cygnal won't be able to do that. Their game plan makes sense, but saying you're going to be like Microchip in the 8-bit MCU space is a bit like all those [IP] licensing companies saying they are going to be like ARM or MIPS."
Coker said Cygnal's opportunities will extend well beyond its initial foray into 8-bit MCUs, although no specific roadmap has been released.
"We're looking at DSP, we're looking at other processor cores," he said. "We think we can repeat this same kind of concept on other base cores besides the 8051. But right now we believe there's a lot of gas left in the 8051 platform."