TOKYO ( ChipWire) -- With the move to third-generation cellular services lessthan a year away in Japan, semiconductor companies are pressing
forward in hopes they can tap Japan's hotly competitive wireless
communications market, now a bellwether for the wireless industry
Analog Devices, LSI Logic, Lucent Technologies, Motorola and Texas
Instruments have beefed up head count in wireless design centers
here, or are preparing to do so, while Intel and Philips are leveraging
partnerships to produce 3G chip sets.
NTT Docomo Inc., Japan's top wireless provider, is at the center of
the activity. Docomo is preparing to roll out 3G services based on
wideband CDMA next spring and is seeking a foothold for wireless
Internet services in Europe, even as its three top competitors plan to
offer alternative services, based on cdma2000, in fall 2001.
"If there's one place we can make an impact immediately in Japan it's
in CDMA," said Greg Helton, the newly appointed vice president of
sales and marketing for LSI Logic K.K. That company plans to double
the number of wireless engineers by year's end, and has made the
push into code-division multiple-access technology here one of its top
For its part, Philips Semiconductors is leveraging a partnership with
Yozan Inc., a Japanese startup developing W-CDMA chip sets that
has a close relationship with Docomo. In an alliance Philips inherited
when it acquired VLSI Technology Inc., Yozan will provide the
matched-filter and rake portions of the chip set and Philips the
W-CDMA baseband ICs based on the ARM7 and Oak DSP cores. The
chip set is expected to sample later this year, in time for
manufacturers to tuck it into 3G phones in 2001.
The partnership could prove lucrative for Philips. Yozan has been
working with Docomo on CDMA since the mid-1990s, and is considered
one of the service provider's closest allies. Indeed, Yozan "may
become one of the most profitable semiconductor device companies,"
said Kiyohisa Ota, a Merrill Lynch Japan securities analyst.
Predictions like those assume 3G services will be a hit in Japan, and
early signs suggest as much.
Perils of success
Docomo's current mobile Internet service for Japan's
second-generation Personal Digital Cellular phones, called i-Mode, has
more than 9 million users little more than a year after introduction,
making Docomo Japan's largest Internet service provider. In fact,
i-Mode has become so popular -- some sources say subscriptions are
rising by 1 million people a month -- that earlier this year Docomo's
servers crashed after being swamped by callers, forcing the company
to temporarily halt new i-Mode contracts.
The glitch hasn't slowed Docomo's move to 3G, which it expects to
introduce in limited metropolitan areas at the end of May 2001, said
Kiyohito Nagata, senior engineering manager for Docomo. So far the
company has conducted in-house test trials using prototype terminals
from suppliers. Final prototypes are expected this summer and field
trials will begin in September. When the service rolls out, there should
be four types of terminals with different bandwidth requirements, such
as video transmission, Internet access, e-mail and voice.
As Docomo readies W-CDMA, rivals DDI, IDO and KDD aim to launch
services based on Qualcomm Inc.'s cdma2000 standard by the fall of
2001. KDD, Japan's former monopoly international carrier, plans to
merge this October with DDI, partly owned by Kyocera, to form a
larger carrier to be called KDDI.
So critical is the move to 3G services that Docomo has set out to
monitor the entire technology chain, even down to the device level.
Nagata recently paid a visit to circuit-technology researchers at a
semiconductor conference in Honolulu, with a twofold mission: to
sketch out the company's 3G plans and to plead for help.
Foremost on Nagata's mind was keeping the power consumption of the
TX power amplifier, which eats considerable juice during talk time, to
a 250-milliwatt maximum. Doing so will take advanced process
technologies. Nagata estimated that devices like digital signal
processors, baseband processors and flash memories will have to use
Another concern is cost. "I know the technology already exists, but I
want a low price," Nagata said.
Meanwhile, the red-hot action in Japan is poised to spread to Europe.
Docomo is acquiring 15% of the Dutch mobile phone service KPN
Mobile NV, with plans to roll out its i-Mode service in Europe. KPN is
said to welcome Docomo's involvement to help with the launch of 3G
multimedia services, and according to European reports most analysts
think the investment marks the start of a Docomo spending spree on
For U.S. chip makers, the KDDI group's cdma2000 plans hold just as
much promise as the Docomo rollout. Qualcomm, which made a
successful bid to get its CDMAone technology adopted by Docomo
rivals DDI and IDO last year, announced last May that IDO and Hitachi
Ltd. would begin field trials of its High Data Rate technology this year.
The Internet Protocol-based HDR is a 2.4-Mbit/second peak rate in a
standard 1.25-MHz channel bandwidth for fixed, portable and mobile
LSI Logic, which holds a license for Qualcomm's CDMA technology, is
playing in the CDMAone, W-CDMA and cdma2000 markets. Its
cdma2000 chip set, now under development, is to be introduced in
tandem with cdma2000's formal debut next year. "We're in constant
talks with DDI," said Helton of LSI Logic K.K.
Helton said service providers and terminal makers will probably first
adopt the 1xRTT version of cdma2000, which uses orthogonal coding
on a single frequency to get data transfer rates up to 300 kbits/s.
The faster 3xRTT spec that Qualcomm is pushing uses three distinct
frequency carriers, he said.
Angling for a piece of a growing business, other chip set makers, such
as Analog Devices Inc., hope to step up their presence in Japan by
focusing on handset customers backing the Qualcomm standard. Sales
of converters and amplifiers for terminals are some of the Norwood,
Mass., company's fastest-selling products in Japan. ADI, which has
also sold baseband chip sets to companies like Kyocera, Toshiba and
Mitsubishi, expects to add at least 15 new designers and field
engineers to its wireless design center, boosting its dedicated wireless
engineering head count to 75 people, said executive vice president
Meanwhile, wireless baseband newcomers such as Intel Corp. are
starting to make inroads in Japan. The microprocessor giant last year
bought DSP Group, a company with design-ins among wireless phone
vendors here, and recently forged a partnership with Japan's
second-largest cell phone maker, Mitsubishi Electric. As part of the
deal, Mitsubishi will use Intel's StrongARM processor in future 3G
Earlier this year, Intel opened a wireless technology development
facility in Tsukuba, Japan, home to many R&D teams here. The
announcement came a few months after Texas Instruments Inc. said
it would move 100 design engineers from Tokyo to Tsukuba to work
under one roof with a team of about 70 researchers at its R&D center,
primarily on W-CDMA. There TI will work with OEMs on its Open
Multimedia Applications Platform, which combines a C55X DSP with the
ARM9 processor along with customer-defined gates of logic, memory
and mixed-signal functionality.
For its part, Motorola's Semiconductor Products Sector in recent
years has made Japan a focal point for wireless baseband chip set
development with its MCore 32-bit RISC CPU as the centerpiece.
Motorola even went so far as to offer MCore free to companies that
would sell MCore-based systems in Japan. So far, Motorola has
announced that Yamaha Corp. will license MCore for applications like
musical instruments, audio devices, game consoles and multimedia
applications, but it's unclear how well the device has been accepted
for cell phones. Motorola's chip group here did not respond to
questions from EE Times.
But another Motorola division has scored at least one coup in Japan.
The Network Solutions Sector has nabbed a key role in Docomo's
Internet Protocol Core network, to be used in moving from i-Mode
narrowband data service to W-CDMA. Motorola will work with Cisco
Systems and Xybridge Technologies to develop the packet wireline
infrastructure for that wireless service.
Lucent Technologies has also been adding resources in an attempt to
crack Japan's 3G market. In the last three years, Lucent has opened
new R&D sites in Yokosuka and Yokohama, where wireless
development is a primary focus. The expansion appears to have paid
off: Docomo picked Lucent as a supplier of basestations and radio
network controllers for W-CDMA. The company is also involved in 3G
trials with IDO for cdma2000.
Docomo expects infrastructure equipment to be finalized as early as
September -- effectively a green light for equipment suppliers like
Lucent. "This is not a trial anymore. This is a product effort," said
William Hardy, director of marketing for Lucent's wireless operations in
The level of investment here by foreign companies in wireless
technology belies the overall disappointing returns seen in Japan in
recent years. For instance, sales from LSI Logic's Japanese subsidiary
have been modest compared with the company's 40% overall
growth, Helton said.
Nevertheless, Japan is noted for a crowded field of fiercely
competitive domestic cellular phone manufacturers producing
ultracompact, full-featured handsets that meet tough price and
product specification guidelines set by influential service providers.
The situation has made it tough for large global manufacturers like
Nokia and Motorola to crack the market. Yet foreign chip and
equipment companies are making progress providing the core
technology to domestic OEMs looking for something more than just
"All major cellular phone vendors here doing wideband CDMA are
developing their own ASICs," Helton said.
-- Additional reporting by Loring Wirbel in the U.S. and Peter Clarke in the U.K.