IBM (IBM) stepped up today to challenge Texas Instruments (TXN) in the growing wireless-communications market, saying it will introduce a digital chip fully compatible with the TI processor, used in about half of the world's cellular phones.
The computer giant said it would take on TI by offering potential customers the "core" data for Digital Signal Processors (DSPs), instead of using an off-the-shelf chip. By going the core route, IBM can build chips tailor-made to meets its customers' needs, a significant competitive advantage.
IBM said that its new US$100 million initiative will yield more than two dozen new chip cores, which will open doors into chip-building for "a variety of products from everyday goods such as digital cameras and set-top boxes to high-end computing systems."
But the core that it singled out today was the one compatible with the widely used Texas Instruments' TMS320C54X DSP, and here's why: TI controls roughly 45 percent of the $3 billion global DSP market (with Lucent Technologies also a strong player), and the market is expected to be worth some $14 billion by 2002.
"As the first alternative to the Texas Instruments product, this core allows electronics designers to incorporate IBM's state-of-the-art chipmaking technology, support, and worldwide resources," IBM said this morning.
The Wall Street Journal reported that IBM has been telling analysts that it built the TI-mimicking chip using reverse engineering. A Texas Instruments spokeswoman had no comment on any potential patent-violation issue, but did tell the paper, "This is really a good indication that we have the best DSP in the market -- that is why they are cloning it."
