Nanotech - The Circuits Blog

Chip giant Qualcomm said that it is seeing a pickup in chip demand. Separately, two chip industry research firms said graphics chips shipments rose in the first quarter.

Qualcomm indicated on Monday that it is encouraged by demand. "We're feeling more comfortable looking forward...We're happy to see chip demand up," CEO Paul Jacobs said during the company's second-quarter earnings conference call. "We're happy to see inventories stabilizing, reaffirming the device demand, we have very strong operating cash flows," he added.

The world's largest maker of cell phone chips had revenue of $2.46 billion, down from the $2.61 billion posted in the same quarter last year, and posted an operating loss of $10 million, reflecting a $748 million charge for litigation settlement related to the settlement and patent agreement with Broadcom.

The sentiment expressed by Qualcomm's CEO adds weight to comments made by Intel earlier this month in its first-quarter earnings conference call. "I believe the worst is now behind us from an inventory correction and demand-level adjustment perspective," Intel CEO Paul Otellini said on April 14.

Reports from market research firms were also positive. On Tuesday, Jon Peddie Research, which tracks the graphics chip market, said shipments were up 3.3 percent from the fourth quarter, "breaking an eight-year seasonal trend that dictated negative sales from Q4 to Q1."

Peddie attributed this, however, to going from nothing to something. "In Q3 and Q4 of 2008 the channel stopped ordering GPUs (graphics processing units) and depleted inventory in anticipation of a long drawn out worldwide recession. But, no recession, no matter how severe, results in zero sales. The world continued to turn and the consumers continued to buy, albeit they bought less," Peddie said in a prepared statement.

Also on Tuesday, Nvidia released information from Mercury Research, another firm that follows chip markets, which said overall graphics chip shipments were up 3.8 percent from the fourth quarter of 2008. The uptick was attributed to improved desktop sales.

Peddie added this cautionary statement. "Things probably aren't going to get back to the normal seasonality till Q3 this year, and we won't hit the levels of 2008 until 2010."

Qualcomm and Broadcom announced Sunday that they have agreed to end patent litigation between the companies worldwide, with Qualcomm paying Broadcom $891 million, according to the announcement.

On Wednesday, Qualcomm delayed its second-quarter earnings statement, citing advanced settlement discussions with Broadcom.

Qualcomm made this statement Sunday: "Qualcomm and Broadcom today announced that they have entered into a settlement and multi-year patent agreement. The agreement will result in the dismissal with prejudice of all litigation between the companies, including all patent infringement claims in the International Trade Commission and U.S. District Court in Santa Ana, as well as the withdrawal by Broadcom of its complaints to the European Commission and the Korea Fair Trade Commission."

Qualcomm will pay Broadcom $891 million over a four-year period, according to the San Diego-based company. The terms of the agreement will not result in any change to Qualcomm's 3G (CDMA2000, WCDMA, and TD-SCDMA technologies) and 4G (LTE and WiMAX technologies) licensing revenue model, Qualcomm said.

The agreement stipulates, among other things, that Broadcom and Qualcomm agree not to assert patents against each other for their respective integrated circuit products and certain other products and services and Broadcom agrees not to assert its patents against Qualcomm's customers for Qualcomm's integrated circuit products incorporated into cellular products.

"We believe that this resolution is positive for both Qualcomm and Broadcom, our customers, our partners and the overall industry," Paul E. Jacobs, chairman and CEO of Qualcomm, and Scott A. McGregor, president and CEO of Broadcom, said in a joint statement.

"The settlement will allow us to direct our full attention and resources to continuing to innovate, improving our competitive position in this economic downturn, and growing demand for wireless products and services," Jacobs said.

The agreement ends longstanding litigation between the companies. For its part, Broadcom had argued in one case that Qualcomm was unfairly limiting competition by putting onerous conditions in its patent licensing agreements. Qualcomm licensed its chipset patents to other chip suppliers with the stipulation that they must limit sales of their products to mobile handset makers that also have Qualcomm patent licenses.

Broadcom had also asserted that the cloud of litigation hanging over it was a sticking point for prospective customers--and did win a judgment against Qualcomm in 2007. Qualcomm, however, had won court rulings of its own, having suits against it dismissed.

Qualcomm has delayed its second-quarter earnings statement because of advanced settlement discussions with Broadcom, the company said Wednesday.

Qualcomm is delaying its earnings statement until Monday due to discussions with Broadcom "regarding a global settlement of all disputes between the parties which, if reached, would have an impact on the Qualcomm's financial results for the fiscal second quarter," the company said.

Revenue and operating income for the second quarter of fiscal 2009, excluding the potential impact of the Broadcom agreement, met or exceeded prior guidance, Qualcomm said.

In related news, on March 16, the U.S. District Court for the Southern District of California granted Qualcomm's motion to dismiss a lawsuit brought by Broadcom seeking a declaration that Qualcomm's patents are exhausted and unenforceable.

In that ruling, the U.S. District Court held that Broadcom failed to show it was entitled to declaratory relief because it did not identify any specific patents that were allegedly exhausted, or an exhaustion triggering sale or license, according to a Qualcomm statement. The court also ruled that Broadcom's purported injuries were too speculative to support the claims alleged.

Broadcom had argued that Qualcomm was unfairly limiting competition by putting onerous conditions in its patent licensing agreements. Qualcomm licensed its chipset patents to other chip suppliers with the stipulation that they must limit sales of their products to mobile handset makers that also have Qualcomm patent licenses.

Qualcomm is gaining in global chip rankings by revenue, while Intel still sits comfortably at the top, according to market researcher Gartner.

Worldwide semiconductor revenue totaled $255 billion in 2008, down 5.4 percent, or a decrease of $14.5 billion from 2007 revenue, according to the final market share analysis released by Gartner on Wednesday.

"While sales held up fairly well in the first half of 2008, in the third quarter the industry started to soften as the economy slowed, and by the fourth quarter sales were deteriorating quickly, causing revenue growth to go into negative territory," said Peter Middleton, principal research analyst at Gartner, in a statement.

Intel held the No. 1 position for the 17th consecutive year, increasing its market share to 13.3 percent in 2008, although revenue declined by 0.5 percent, a result of spinning off its NOR flash memory business, Gartner said. "The company outperformed the industry average due to the strong performance of its notebook business in which the company gained share throughout the year," according to Gartner.

(Credit: Gartner)

Reports on Thursday say Intel, whose shares have been gaining over the last month, may fare better than expected when it reports earnings on April 14. "We think the first-quarter results will beat Intel's internal forecast and consensus estimates and expect second-quarter guidance to reflect modest growth," The Wall Street Journal reported Thursday, quoting Wedbush Morgan analyst Patrick Wang.

The Santa Clara, Calif.-based chipmaker, however, should probably keep an eye on its flourishing California rival, San Diego-based Qualcomm--the "best performer" among the 2008 top 10 in Gartner's market share analysis. The world's largest supplier of cell phone silicon saw growth of 15.3 percent, driven by a strong first three quarters of the year. It jumped in ranking from No. 11 in 2007 to No. 8 in 2008.

Samsung, the No. 2 chip vendor, was among the hardest hit because its main products lines are memory, a chip category that saw steep declines in 2008. The company's revenue fell 15 percent in 2008 as a result of oversupply and consequent price drops in DRAM (used as the main memory in PCs) and NAND flash (used as storage in cameras, digital music players, and solid-state drives).

No.3 Toshiba saw revenue fall 10.3 percent in its lines of chips for consumer, wireless, and automotive electronics due to a market free-fall in the second half of 2008, Gartner said.

Broadcom led the rankings in 2008 for "Relative Industry Performance"--which measures the difference between industry-specific growth for a company and actual growth, indicating which companies are outperforming (or underperforming) their business segments. Broadcom benefited from solid performance in the set-top box business, helped by Blu-ray and digital TV products and the sale of digital converter boxes for the DTV conversion in the United States, Gartner said. Broadcom also fared well in Ethernet switches, broadband modem chips, Bluetooth, Wi-Fi and GPS.

Taiwan's economic affairs minister has retreated from previous statements that suggested a merger of the country's ailing memory chipmakers was likely, saying it's "too complicated," according to reports.

Instead, Taiwan Memory Co., the new government-backed entity, will focus on acquiring technologies and tapping existing manufacturing plants in Taiwan, according to a Bloomberg report.

Economic affairs minister Yiin Chii-ming and John Hsuan, a former United Microelectronics Corp. executive who was appointed by the state to oversee the formation of Taiwan Memory, are also saying that the scale of the aid plans will be pared back, Bloomberg said. This is a departure from previous statements that suggested a massive consolidation of the six loss-ridden memory chipmakers was likely.

"It is wrong to assume we would take in these companies with all their debts and problems," Bloomberg reported, citing an interview with Chen Chao-yih, head of the economic ministry's industrial development bureau. The six companies have combined debt of about $11 billion.

Taiwan's memory chipmakers lost a combined $12.5 billion in 2007 and 2008, highlighting the dire straits--including bankruptcies, widespread plant closings, and layoffs--that the memory chip industry is in worldwide.

The six companies are: Nanya Technology, Inotera Memories, Powerchip Semiconductor, Rexchip Electronics, ProMOS Technologies, and Winbond Electronics.

National Semiconductor said Wednesday it would slash 1,725 jobs, or about one-fourth if its workforce, as earnings dropped sharply in its most recent quarter.

Manufacturing facilities in Arlington, Texas, will be shuttered

(Credit: National Semiconductor)

The Santa Clara, Calif.,-based company reported on Wednesday that its fiscal third-quarter profit plummeted 71 percent, to $21.1 million from $72.9 million a year ago. Revenue dropped 36 percent to $292.4 million.

Job cuts will take place across the company, which currently has a workforce of about 6,500, and will involve, in coming months, the shuttering of facilities in Arlington, Texas, and Suzhou, China.

The chipmaker will incur charges of $160 million to $180 million in severance and other costs.

National Semiconductor describes itself as a supplier of "energy-efficient analog and mixed-signal semiconductors." Its products include "power management circuits, display drivers, audio and operational amplifiers, communication interface products, and data conversion solutions," according to its Web site.

There's more bad news to come. The company said on Wednesday that it expects between a 5 percent and 10 percent sequential decline in sales, well below analyst expectations.

Advanced Micro Devices worries that lingering issues--both real and speculative--with Apple MacBooks are giving laptop graphics a black eye.

In a phone interview Tuesday, Stan Ossias, director of marketing, mobile graphics, at AMD, began by asserting that my March 11 post "overstated" the case about heat and the instability of graphics processors in laptops and that some readers may interpret heat issues too broadly.

"In the case of Apple's product, I don't know what happened with Nvidia's GPU but we'd like to avoid having the negative aspects taint the entire industry," he said. (GPU stands for graphics processing unit.)

Most recently, there have been reports of performance issues with Apple's new 17-inch MacBook Pro, which has the Nvidia GeForce 9600M chip. But it's unclear whether Nvidia's chips are really the problem and it's not known how widespread the issues are.

Ossias started off the discussion by spelling out how AMD mobile graphics processors can adjust performance and power consumption to different conditions. (The technology, it should be noted, is applied in various ways by many graphics chips.)

"When the system is calling upon the GPU to do more work, we either increase the voltage or increase the clock speed or increase the operating attributes of the system in order to maximize the performance, and when those things are not in demand we can scale them back so they're not constantly being run at their maximum. This is the way we go about trying to avoid overheating," he said. Strict implementation of these design parameters is particularly critical in systems where there is the greatest potential for overheating: thin notebooks and high-end gaming notebooks, according to Ossias.

AMD provides tools to PC makers, he said, who make the final design decisions on how the GPU will perform in different power-usage scenarios. But sometimes the laptop maker won't make the best choice.

"Somebody may choose a GPU that doesn't necessarily have the best operating characteristics or doesn't deliver the optimal power consumption in all operating ranges. That's a constant development challenge" for laptop makers, he said, then added: "A very, very large proportion of our customers do a very good job of this."

"I don't think Apple does a bad job of this in general. They are extremely meticulous generally," he said. However, in some cases "a product decision is made (where) maybe there is more emphasis put on performance characteristics than on another characteristic. Again, that's another choice that can be made," Ossias said.

Ossias gave an example of the type of graphics chip that would not go into the new MacBook Pro, which is about an inch thick. At the high end of its mobile graphics chip lineup, the ATI Mobility Radeon 4870 can draw as much as 45 watts--a big power draw for a mobile chip. Due to these power characteristics, this would not go into a thin form-factor notebook like the new MacBook Pro, he said.

AMD announced new mobile GPUs last week based on a cutting-edge 40-nanometer process

(Credit: AMD-ATI)

Last week, AMD announced groundbreaking mobile GPUs, the ATI Mobility Radeon HD 4830 and 4860, based on a cutting-edge 40-nanometer process. Both chips compete in the same general performance category as the 4870 but start at a much lower power-consumption level (the low 20-watt range) and "therefore you can actually get the 4830 into a thin and elegant notebook design," according to Ossias. AMD's current 4650 and 4670 can fit into thin form factors also, he said. These latter two chips would be in the same class as the Apple MacBook Pro's Nvidia GeForce 9600M, he claimed. The 9600M is the chip alleged to have heat and performance issues.

"I know that when Nvidia announced (in October of last year) publicly that it was recalling or having to rework some of its products and they took a big write-down, we had to address concerns from our customers that we were not also experiencing packaging failures because of the overheating and design flaws that they were experiencing in their product line," he said. "So, we basically had to go and calm down a lot of our customers and say, look, this is not something that's inherent to our technology, it's not something that you have to expect from any GPU."

Nvidia is again at the center of a graphics tempest in the media, this time surrounding performance issues of Apple's new 17-inch MacBook Pro. Two little pesky questions haven't been answered yet, however. Are Nvidia graphics chips really the problem? And are the issues really that widespread?

Postings in an Apple discussion forum cite a smorgasbord of problems: Some cite the Nvidia GeForce 9600M, while others point to issues with fan speed. Another post points to faulty wiring and another to the main processor (i.e., Intel). But this is just one forum. Does this really indicate widespread problems?

Does the Apple MacBook Pro 17-inch unibody have chip issues?

(Credit: Apple)

I haven't heard back from Apple. Nvidia had no comment Monday.

So, I spoke with a few people who have informed insights into potential problems. Not all would speak on the record, however. Jon Peddie of Tiburon, Calif.-based Jon Peddie Research, which tracks the graphics chip market and does testing on graphics chips, said he hasn't tested the new MacBook Pro yet. Generally speaking, however, a GPU problem of this sort would dictate a BIOS change to adjust the fan speed (one of the possible solutions proposed already). Or, if it's more serious, the graphics board would need to be replaced. (BIOS stands for basic input-output system; GPU stands for graphics processing unit; CPU stands for central processing unit.)

"If either of those conditions were true, Apple would be issuing an alert," he said. The alternative is for Apple to deal with the alleged problem on a piecemeal basis, one customer at a time, Peddie said.

The latter scenario--the status now--of course leads to a lot of speculation and attempted diagnoses among users.

I also contacted another analyst, Linley Gwennap, principal analyst at the The Linley Group. He made some obvious points but important in the context that it's not necessarily the GPU. Basically he said that if any chip exceeds the "thermal design budget," the system becomes unstable.

Other people I contacted (who wished to remain anonymous) said the issue appears to be more of a fan issue than a GPU issue. But the jury is still out. And, let's be clear, Nvidia has been faulted for past MacBook glitches. The most recent being in October. Will Nvidia be perpetually plagued by fallout from past problems? The 1994 Pentium FDIV bug was an Intel albatross for years.

I see another ancillary issue--not necessarily directly related to the MacBook Pro issue discussed above--that needs to be addressed. Here's the proposition: you want better graphics but you also want a sleek laptop like the Apple MacBook Pro. Well, if you're pushing the outside of the graphics-performance envelope, something's got to give. It's like saying: I want a car that goes from zero to 60 in under four seconds but with low emissions.

The truth is high-performance discrete GPUs and Intel CPUs--even the ones with the "m" (for "mobile") suffix--will sometimes wreak havoc when they're stressed inside enclosures only 1-inch high (i.e., many laptops). But I'm stating the obvious (I think). Anyone who has maxed out a relatively high-performance GPU or CPU in a laptop knows the real meaning of the euphemism "uncomfortably hot"--a phrase often used in discussion forums.

Overheating results in a lot of unpleasant (and sometimes seemingly unrelated) surprises, including BSOD (Blue Screen Of Death), automatic (arbitrary) shutdown, and, as in the case of the MacBook Pro, graphics artifacts.

Some people will always point their finger at Nvidia (or ATI) but I submit that some of those people experiencing problems would be the first to raise a stink if Nvidia didn't offer a high-performance laptop graphics chip to run Crysis at the frame rates and resolutions they demand. Yes, a product should work as advertised but there are limits to what a GPU (or CPU) can do inside the thermally challenged, cramped quarters of a laptop.

Not that Nvidia is absolved of any and all crimes. Far from it. As I stated above, Nvidia has had its share of problems that were its own fault. But even Intel's integrated graphics (theoretically the most power efficient) has heat gotchas of its own. Heat has been an issue in the first version of the Intel-graphics-based MacBook Air (when playing video)--which I can vouch for since I own a first-generation MBA. And I have another laptop (from a top-five PC maker) with integrated graphics that immediately heats up (and sometimes overheats) when running video.

But back to discrete GPUs. If you want desktop-level graphics in your sleek laptop, then you're going to have to take the heat and, consequently, in some cases--if you push the graphics card--instability and graphics anomalies. That doesn't make it right. It's just a fact of life.

Taiwan named a chip industry veteran to head a state-backed company that will merge six memory chipmakers, following pleas from domestic companies desperate for financial aid.

Previous reports had cited an approval for loans, but on Thursday the economic affairs ministry took this a step further and named former United Microelectronics Corp. executive John Hsuan to head a state-backed company, according to Bloomberg. Taiwan's government will hold less than a 50 percent stake.

Taiwan Memory Co. will be established within six months. It has not been decided yet what role Japan's Elpida Memory or U.S.-based Micron Technology would play, according to the report. One of these two memory chipmakers could either collaborate with the merged companies or become part of the new entity.

At stake is Taiwan's dynamic random access memory (DRAM) industry. DRAM is the main memory used in personal computers. While all memory chipmakers have been suffering, Taiwan's DRAM industry has been falling further and further behind market leaders Samsung and Micron and posting big losses.

The Taiwan-based companies are Nanya Technology, Inotera Memories, Powerchip Semiconductor, Rexchip Electronics, ProMOS Technologies, and Winbond Electronics.

The companies posted combined losses $12.5 billion in 2007 and 2008, Bloomberg said.