SAN FRANCISCO -- Texas Instruments Inc. is pulling the plug on its read-channel IC development efforts for hard-disk drives and reassigning more than 100 analog design engineers from those projects to high-growth communications chip applications, said Tom Engibous, TI president and chairman, during a speech here today.
While speaking before the Banc of America Securities investment conference, Engibous disclosed the move, saying that TI will continue its pre-amp and servo driver product activities. The decision to drop read-channel chips will kill TI's "superchannel" IC, which integrates a digital signal processor (DSP) core, read-channel functions, logic blocks and memory for program and buffer storage.
The Dallas-based company has been sampling prototypes of the superchannel device since early this year, and it was hoping that the highly integrated CMOS chip would help the company regain the lead in read-channel IC markets. During an annual briefing for analysts and the press in March, TI managers said the superchannel chip had the potential to generate $600 million to $800 million in revenues by 2002(see March 2 story).
During 1999, TI slipped to third place in the read-channel chip market, according to estimates by Forward Concepts in Tempe, Ariz. The market research firm placed Lucent Technologies Inc. as No. 1 in the $1.5 billion market, followed by Cirrus Logic Inc. Forward Concept has predicted that integrated read-channel/DSP chip sales worldwide will grow to about $2.4 billion by 2004, overtaking the embedded function from microcontroller-based devices.
For a couple of years, TI has been struggling to pump new momentum into its read-channel chip business. In 1996, the Dallas-based company took the top spot in the market when it purchased Silicon Systems Inc. of Tustin, Calif., for $575 million, but TI slipped in market share in late 1990s partly because the SSI operation became too focused on analog-based channel chips.
The supperchannel chip was produced with TI's 0.18-micron drawn process technology (0.15-micron effective gate lengths). In March, TI said it was "engaged" with four of the top five PC hard-disk drive manufacturers.