The move comes at a time when volume sales for the seemingly ubiquitous interconnect is on the rise. Smart phones are just beginning to shift from the 12 Mbits/second full-speed USB to the 480 Mbits/s high-speed spec to handle increasing image, music and video requirements.

SMSC product marketing manager Ken Ngai estimates the percentage of smart phones moving to high-speed USB is shifting from about one percent last year to as much as twenty percent in 2008. Market watcher Gartner Group projects smart phone sales will rise from less than 100 million last year to more than 400 million units in 2010.

Total shipments of USB devices could rise to 2.8 billion units by 2010, a 100 percent increase from 2005, according to International Data Group (Framingham, Mass.).

The 332x family is based on a 3.8 mm-squared die compared to a 9mm-squared die in last year's offerings. The size has been slashed in half or more nearly every generation since the company first put out products at a whopping 144mm-squared in its first-generation product.

The current chip fits in a 1.95x1.95 package and consumes 75 percent less board space than the previous generation.

Power is also rapidly coming down. The new chip consumes 96 mW compared to 158 mW previously in native mode. In standby mode it draws just 20 microA, compared to 83 microA for the existing chip.

Ngai estimates last year's product had a total system cost of about $1.20 including required discrete. "We will provide this new chip at a total system cost of 20-25 percent less," he said.

The reduction comes in part from higher integration. SMSC was able to pack a previously external oscillator into the transceiver and eliminate the need for overvoltage protection while using the same mainstream 180nm process technology.

"This process is the sweet spot for cost and performance given the analog content of the chip," said Ngai.

However, SMSC is considering a shift to 130nm technology for its 2009 products as it mulls ideas for further integration for the part which today only requires a small external capacitor. The eight-member 332x family includes parts with clocks running from 12 to 52 MHz.

The rapid commoditization comes at a time when the USB community is reviewing specs for the next big leap. The USB 3.0 standard is said to be in a version 0.78 draft. It aims to enable data transfers at speeds approaching 5 Gbits/s.

A closed-door meeting in San Jose in late January was the first industry review of the standard. Ngai described the meeting as "pretty productive" for the technology he sees gaining use as an interconnect for external hard disk drives, potentially replacing Firewire and external SATA.

"There is a lot of work to be done at the spec level, but Intel and some other people driving it want to get the spec closed quickly," Ngai said.