Silicon Labs, TSMC shrink cellphone chips

Texas-based Silicon Laboratories Inc, a developer of specialized telecommunications integrated circuits, has paired up with the world's leading manufacturer of chips to order, Taiwan Semicon-ductor Manufacturing Co (TSMC, 台積電), to produce a single chip for mobile phones that combines the functions of several components on one piece of silicon smaller than a NT$1 coin.

Executives from both companies said yesterday that the production process used by TSMC squeezes more transistors onto the same size of silicon resulting in cost savings, which is music to the ears of Silicon Labs and its customers.

"The new process reduces the price of the chips," said TSMC vice president Tzeng Fan-cheng (曾繁城). "The cellphone industry is very interested in this product."

The new chip is a power amplifier that boosts the radio signal a mobile phone emits to communicate with the nearest network base station.

Silicon Labs and TSMC claim to have squeezed up to eight standard circuit components onto just one, reducing the size of the power amplifier from 70mm2 to just 25mm2.

smaller components, greater performance

As phones perform more complicated functions in ever smaller models, manufacturers are demanding greater performance out of smaller components from chip designers such as Silicon Labs.

"Today over 40 phone makers have sampled and are evaluating the amplifier," said Ed Healy, a vice president of Silicon Labs responsible for wireless products.

One analyst said yesterday's announcement underscored TSMC chairman Morris Chang's (張忠謀) comments at the end of last month when he told investors growth in the communications sector would outpace increases in computer and consumer chip sales.

"TSMC is stronger than [rival] United Microelectronics Corp [UMC, 聯電] in communications and handset customers," said Alfred Ying (應宗傑), an analyst at BNP Paribas in Taipei. "We can expect more news like this this year."

UMC chief executive Jackson Hu (胡國強) told investors last week that orders would rise evenly in all three sectors.

The chipmaking industry is cramming more and more transistors onto wafers. Denser chips perform more functions in smaller packets, but also reduce costs for chipmakers and their customers. The most advanced products being developed now have transistors measuring just 90 nanometers across, or one-thousandth the width of a human hair.

Advanced technologies will not be a major contributor to sales at TSMC and UMC until next year.

"If we translate the contribution from the more advanced technologies into sales and profit, then 90nm will not be significant this year, at around 5 percent of sales in 2004 for TSMC," Ying said.

Hu told investors at a conference last week that he expected 90nm to account for 4 percent of sales this year.

Healy also said yesterday that it would take six to nine months for mobile-phone handset makers to design his company's new chip into their products, meaning that mass production and significant sales would not show until next year.

Yesterday TSMC reported a sales increase of almost 46 percent last month compared to the same month last year. The company's January sales topped NT$19 billion, a statement from the company said.