Texas Instruments Inc. today will pit a beefed-up version of its ASIC design program against market leader IBM Corp. in an effort to break into the elite corps of application-specific chipmakers.
Steve Sutton, vice president of TI's ASIC business unit here, said the company recently manufactured for an undisclosed customer a 5.5-million-gate ASIC operating at 312MHz with nearly 1,000 signal lines and 10Mbits of SRAM. That feat, he said, demonstrates TI's ability to compete with IBM.
Although TI has produced ASICs for decades, the company historically tailored its CMOS manufacturing efforts to high-volume, low-cost cell phones, Sutton said. TI expects its latest advances will allow it to participate solidly in the multimillion-gate ASIC market, serving customers making products like communications infrastructure equipment.
"Even six months ago we couldn't have done this," Sutton said. "This business is coming out of hibernation and moving out from the middle-of-the-pack ASIC technology we've had for years. We've made a fundamental shift both in technology and manufacturing capabilities to focus on the high-performance end of the ASIC market."
The strategy evolved in part as a response to what TI said was customer dissatisfaction with the limited number of ASIC suppliers capable of manufacturing multimillion-gate devices.
"TI is a company that has a lot to offer," said Jerry Worchel, an analyst at In-Stat Group, Scottsdale, Ariz. "Their research labs are right up there with the leading companies, but they've never advertised or pushed their ASIC capabilities. I think they realize they're missing an opportunity. They have everything that is needed, so why not use it?"
TI's annual ASIC revenue is approximately $200 million, and the company doesn't appear among the top dozen suppliers. However, Sutton claimed that if the custom chips that TI makes for use in Nokia phones were counted, the company would rank as the industry's No. 2 ASIC vendor by revenue. Those chips, which generally have fewer than a million gates, are typically classified as application-specific standard products.
Tom Reeves, vice president of IBM's ASIC product group in East Fishkill, N.Y., said that while TI has upgraded its competitive stature, the company still doesn't address the upper reaches of the ASIC market.
"They really aren't capturing the leading edge of the market," Reeves said. "We have already done dozens of ASICs in the range of 10 to 30 million gates, and our average ASIC exceeds 5 million gates."
In addition to IBM and TI, other companies capable of offering ASICs of 5 million or more gates include Agere Systems Inc., LSI Logic Corp., and NEC Corp.
"There's probably enough pie for them to slice up," Worchel said. "Design starts of that magnitude may be going down, but the margins are very lucrative."
TI's ASICs are being manufactured on a 0.13-micron process, and the company plans to offer 90nm production next year, Sutton said. Although there is no timetable, TI also said it will move ASIC manufacturing to its 300mm-wafer fab in Dallas.
IBM is also making ASICs on a 0.13-micron process using both 200- and 300mm wafers, Reeves said, and has similar plans to move to 90nm linewidths. Because of the expense involved, no other supplier in the high-performance ASIC market is expected to build its own 300mm fab.
"You can get significant cost leverage in a 300mm factory implementation," Reeves said. "I think that should clearly continue to provide us an edge."
In fact, rising costs, particularly the escalating cost of ASIC designs produced in 0.13-micron and 90nm processes, will make it increasingly difficult for customers to migrate between suppliers, In-Stat's Worchel said.
"When [you] move to 90nm, you can have total [nonrecurring engineering charges] of $3 million to $5 million," he said. "Once you get in bed with somebody, you don't want to get in bed with someone else. It's too expensive, and time-wise it's too risky.
"That said, customers do like to know that if their supplier falls off the earth, there's someone who can keep them in business."
From IBM's perspective, continued investment on the part of the ASIC vendor will remain an important component of success, Reeves said. Just as important, he added, is an ability to help customers maintain their familiarity with design tools and associated IP, whether from the ASIC supplier itself or a third-party partner.
Sutton said TI has 15 to 20 ASIC customers, and that about 80% of its designs are manufactured using a 0.13-micron process with a minimum gate count of 2 million and a typical gate count of about 4 million.
Despite a general trend showing a decline in ASIC starts over the next several years, Sutton said he sees opportunities for high-performance ASICs in Internet infrastructure and wireless basestation applications as the market rebounds.
"The communications infrastructure space is on its knees right now, but I believe there's terrific growth potential going forward for high-performance ASICs," he said. "And I can guarantee you'll see us move up the list of top ASIC suppliers. The market out there is waiting for an alternative, and we're being embraced readily."