Will Strauss, president of Forward Concepts, said Freescale's move is part of a larger trend among microcontroller and DSP vendors to protect investments in software development by offering compatible chips in the low and high end of the performance range.

The company also plans to introduce a line of low-end 8-bit microcontrollers this spring that are designed to carve out market share in the reduced-cost sector.

The Freescale chips slated to sample by the end of the year will be the company's first step in a long-term strategy to offer a continuum of controllers and tools. Those products will "knit together" the 8-bit and 32-bit product lines, said Paul Grimme, senior vice president and general manager of the transportation and standard products group.

Grimme acknowledged that Freescale's strategy is similar to one pursued by Atmel Corp. (San Jose, Calif.), which has developed compatible AVR microcontrollers across the 8- and 32-bit address lines.

Discussing Freescale's more-immediate plans, Renee Mitchell, manager of the 8-bit controller business, said the company's reduced-cost 8-bit core, the RS08, will be used in a line of 8-bit controllers that will be introduced this spring. The core will be aimed at the 50 cents-and-below market. Freescale now sells 8-bit controllers that are priced from 50 cents to $5 each, with an average selling price of $1.67.

"We haven't made the investments needed to compete with Microchip at the lowest corner of the 8-bit market. But we are now dead serious about the low end," Mitchell said.

While Freescale is concentrating on the low-end 8-bit sector, Microchip Technology Inc. is developing a line of 16-bit MCUs and related DSP capabilities for its PIC24 and dsPIC product lines.

Lost-cost thrust

Tony Massimini, an analyst at Semico Research, said the bulk of the 8-bit MCU market is now below the $1 price point, even if the smart-card market is excluded. "Freescale has had a reputation of throwing everything, including the kitchen sink, into a design. The integration is impressive, but not all 8-bit designs require that. So this RSO8-based line of controllers is a wise move to compete for high-volume applications."

Freescale continues to hold the No. 1 revenue position in both the 8-bit and 32-bit MCU markets. But Strauss of Forward Concepts said that in the sub-$1 microcontroller market, Microchip beat Freescale to the punch, offering a broad line of microcontrollers that gained Microchip bragging rights as the company that ships the highest unit volumes in the 8-bit market.