Forward Concepts Wireless/DSP Bulletin - November 22, 2016

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November 22, 2016

By Will Strauss

Qualcomm Intros 10nm Snapdragon 835 with Quick Charge 4

Last week Qualcomm announced their next generation mobile System on a Chip (SoC) called the Snapdragon 835. It will be built on Samsung’s 10nm FinFET technology, making it an industry first in semiconductor process technology. Qualcomm claims that this will allow the 835 to deliver a 30% improvement in area efficiency, 27 % higher performance or up to a 40% reduction in power consumption (presumably compared with the current-generation 820 designs). The device also offers Quick Charge 4 which the company claims to offer 20% faster charge times with the capability to deliver 5 hours of battery life in only 5 minutes charging, based on internal testing on a 2750 mAh battery, a typical size for premium smartphones now on the market. There have been times in airports when a 5-minute charging could have allowed my cellphone to be ready for my next stop.

A Fab vs. Fabless Perspective on the Pending Qualcomm/NXP Merger

Through its history, Qualcomm has been a fabless semiconductor company, employing silicon foundries for its silicon production. NXP, on the other hand, has employed foundries for some of its production, but still has a significant portfolio of chips that it makes in its own wafer fabs; some in Nijmegen, some in Eindhoven and some in the former Freescale fabs in Austin and Mesa (AZ) and perhaps elsewhere. To be sure, none of these fabs are 10nm-capable, and are unlikely to ever be, but are still adequate for most of the current NXP product line.

The president of a fabless company that was considering building its own fab (back when one could afford to do that) told me of his thinking: “Having a fab is like having a swimming pool full of sharks…that you have to feed every day.” Having worked for a semiconductor company that has its own fabs, I can tell you that there is a different mindset in keeping those sharks fed every day, as opposed to letting a foundry worry about care and feeding of those sharks (wafers). The concerns of adequate volume moving through the fab and keeping yields up is a very real (and constant) concern. Moreover, fabs have a finite productive life. I can still remember when three of Motorola Semiconductor’s early fabs in Mesa Arizona {my home town) were demolished and the land has since become an industrial office complex. For those who don’t remember, Motorola Semiconductor became Freescale Semiconductor which was later acquired by NXP Semiconductor.

Merger/Acquisition Mania Continues Unabated

There have been so many mergers and acquisitions this year, we’ll just highlight those we care about announced within the last couple of weeks:

-Siemens to Buy Mentor Graphics for $4.5B

Germany-based Siemens has announced that it has reached a deal to buy EDA house Mentor Graphics (Wilsonville, OR) for $4.5 billion in cash. Mentor will be folded into the product lifecycle management software business of Siemens’ DF Division. Mentor is one of the big three EDA companies and is also the leading supplier of wire harness design software for the automotive and aerospace industries. There is some concern that regulatory approval may prove difficult to obtain since it involves one of the big 3 EDA houses.

-Broadcom to Buy Brocade for $5.9B

Singapore-based Broadcom (nee Avago), announced that they have entered a definitive agreement under which they will acquire Brocade Communications Systems, Inc., a leader in Fibre Channel storage area networking and IP networking for approximately $5.5 billion plus $0.4 billion of net debt. Interestingly, Brocade is seeking a buyer for its IP Networking business which includes a portfolio of open, hardware and software-based solutions spanning the core of the data center to the network edge.

-Samsung to Buy Harman for $8B

Harman International Industries is best known in the U.S. for its Harman Kardon high-end audio equipment along with its JBL, Infinity and dbx products. However, about two-thirds of its sales come from the auto industry. Harman also builds infotainment, connected safety, security and telematics devices and services used in over 30 million vehicles built by BMW, Toyota, Volkswagen and other automakers. So, it’s clear that Samsung is significantly beefing up its automotive business with the acquisition (even though some of Harman’s audio business appears to be a bit redundant to Samsung’s).

As always, I encourage your feedback.

Will Strauss

President & Principal Analyst

Forward Concepts

Domain: Electronics
Category: Semiconductors

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