At a time when sharp competition for fewer and fewer new ASIC sockets is sending vendors in search of other avenues, Agilent Technologies Inc. is jumping into the market with both feet.
After more than 20 years of supplying printer ASICs exclusively to Hewlett-Packard Co., Agilent--which was spun off from HP three years ago--has begun shopping its custom-chip design capability to other large OEMs.
The Palo Alto, Calif., company dipped its toe in the merchant waters in 2000, taking on a network transceiver design for Cisco Systems Inc. The device represented Agilent's first non-HP ASIC design win--a deal the company said grew out of its position as Cisco's largest SerDes supplier.
With that chip slated to enter production this year, Agilent now has its sights set on selected Tier 1 customers with a "critical mass of ASIC available market" in the computing, storage, and networking segments, said James Stewart, vice president and general manager of the ASIC Product Division of Agilent's Personal Systems Business Unit.
As a fabless supplier, Agilent's strength, according to Stewart, lies in its system-level know-how and its IP--including high-speed serializer/deserializers (SerDes), Fibre Channel transceivers, and image sensors.
"We can handle any ASIC challenge from sub-$5 devices with very aggressive time-to-market requirements all the way to very high-end ASICs pushing the edge in terms of package pinouts, I/Os, and tens of millions of gates," Stewart said.
Agilent hinted at a merchant ASIC play at the time of its separation from HP, but last week some questioned the wisdom of its timing, when design opportunities for the single-use chips are diminishing.
iSuppli Corp., El Segundo, Calif., recently estimated that in 2002, fewer than 1,500 new ASIC projects were undertaken, as system designers opted instead to use chips that can be applied to many applications.
Still, the company believes the reputation and "broad and deep" product portfolio of its $1.6 billion Semiconductor Products group will help it win ASIC sockets at existing customers, according to Stewart.
"Most every company we talk to is already serviced by Agilent in some other area," he said.
Moreover, Agilent is uniquely positioned as a unit of one of the leading vendors of semiconductor test and measurement equipment, a role that led to its co-development with Cisco and others of a new testing standard for I/Os in the 2.5- to 3.125GHz range, Stewart said.
Agilent today will announce it is the first chipmaker to demonstrate the AC-Extest extension of IEEE 1149.6, using a test chip that integrates more than 30 3.125Gbit/s SerDes channels.
Established relationships and desirable IP-like SerDes and imaging technology will be a strong lever for Agilent as it tries to win ASIC sockets away from heavy-hitters like IBM Microelectronics and Fujitsu, said Bryan Lewis, an analyst at Gartner Dataquest, San Jose.
"Cisco went to Agilent for a reason, and it's unlikely it was price," Lewis said.
Agilent's plan to limit its design engagements and deliver board-level, firmware, and software support is a sound approach, given the calibre of customer it's targeting, said Jordan Selburn, an analyst at iSuppli in San Jose.
"Even though design starts are declining, revenue per design is going up," Selburn said. "If they're going after just a few designs, they can keep their operating costs down and make a fair amount of money."
Still, it's a crowded market, and even the best companies struggle to remain competitive, said Keith Horn, vice president of marketing at Fujitsu Microelectronics America Inc., Sunnyvale, Calif.
"To enter a market where there are a lot of entrenched players and a shrinking number of design starts is, I think, a bold move," Horn said. "The gulf between suppliers that can play at the high end and others is widening. The stakes are much higher now."
Agilent ranked No. 13 in worldwide ASIC revenue, with approximately $360 million in 2002, according to Data-quest. The company has ASIC design centers in six countries, and more than 300 ASIC designers--capacity that was added in anticipation of new ASIC business following the split from Hewlett-Packard, Stewart said.
The company is using the foundry services of Taiwan Semiconductor Manufacturing Co. Ltd. and United Microelectronics Corp., and operates a joint venture fab in Singapore with Chartered Semiconductor Manufacturing Ltd. Packaging and assembly services are to be handled by Amkor Technology Inc.