Taking an innovative approach to attack the communications market, Cypress Semiconductor Corp. has spun off a new company within the 8-bit microcontroller sector.
The new entity, Cypress MicroSystems Inc., is technically a subsidiary of San Jose, Calif.-based Cypress Semiconductor. But effectively, Cypress MicroSystems will be run like a startup in an effort to bring new products to the market more rapidly.
According to its charter, Cypress MicroSystems plans to develop a new family of communications-oriented embedded ICs that integrate an 8-bit controller line with other programmable-chip functions to address applications like cell-phone handsets, PDAs, and modems.
Initially, the new venture will utilize Cypress Semiconductor's existing M8 family of 8-bit controllers as the foundation of its new product line, known as a programmable system-on-a-chip (PSoC). Then, it plans to integrate and wrap other chip functions -- flash-memory, Universal Serial Bus (USB), analog-IC, and others -- around its 8-bit MCU line. The company also will employ Cypress' Sonos technology, a proprietary, programmable, non-volatile technology that has been integrated with Cypress's highest-volume RAM4 SRAM process technology.
The new products are geared for a host of embedded applications in the data-communications and related markets, according to Bob McConnell, the new president and chief executive of Cypress MicroSystems, based in Woodinville, Wash., near Seattle. McConnell is a 25-year veteran of Advanced Micro Devices Inc., Sunnyvale, Calif., and most recently served as vice president of AMD's Embedded Products Division.
"We will focus on the development of general-purpose microcontrollers," he said in an interview. "But we are developing more than just 8-bit controllers. The key is the peripherals that go around these chips. We expect to develop single-chip products [that combine] extensive analog and digital capabilities."
The spin-off represents Cypress Semiconductor's ongoing efforts to expand into the communications-chip market. Once a provider of commodity-oriented SRAMs, the company has moved into the ATM, SONET, and other communications-chip segments, and has leveraged its existing SRAM lines into the cell-phone market and other segments.
Cypress Semiconductor, which is the sole shareholder in Cypress Microsystems, did not disclose the new venture's financial structure, but said it will initially have 16 employees and will roll out its first 8-bit products in the third quarter.
McConnell acknowledged that Cypress MicroSystems will compete against a number of established players in the 8-bit MCU market market. "Our main competitors are Motorola and Microchip, but we feel that we can build a better mousetrap," he said, adding that the new company will also go head-to-head against the likes of Atmel, Philips, and STMicroelectronics.
What is Cypress Microsystems' competitive advantage?
"Putting us into a separate company will also allow us to focus on system-on-a-chip products," McConnell said. The new subsidiary also will have access to the parent company's manufacturing base, and its process and design technology. It will also be able to draw from Cypress Semiconductor's sales force.
"Cypress has manufacturing muscle and a roadmap currently extending to 0.16 microns," said T.J. Rodgers, Cypress Semiconductor's president and chief executive, in a statement. "It has expertise in processes critical to communications product design, such as [Sonos] and BiCMOS. Cypress also has broad competencies in other communications-centric technologies, including non-volatile and specialty memory, high-speed logic, analog PLLs, and serializing/deserializing functionality. This IP is compatible with Cypress's core SRAM technology, making it easy and cost-effective for Cypress -- and Cypress MicroSystems -- to mix and match technologies to create new communications products."
The market is ripe for SOC-based microcontroller devices, McConnell said. At the same time, the overall microcontroller market is expected to grow from $9 billion in 1998 to $12.5 billion by 2003, according to In-Stat Group, Tempe, Ariz.