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Clear signals The digital signal processor market is exploding, as demand grows across all industry segments
The digital signal processor (DSP) market isn't heating up; it's already boiling hot. In fact, DSP technology is in almost every gadget we touch. From cell phones and computer modems, MP3 players, digital TVS and DVDs, to voice-over-Internet Protocol (VoIP) connections, medical devices, navigation systems in cars and refrigerators in homes, DSP has found its place processing real-world information digitally. Even with the acknowledgement by research firms like Forward Concepts Co. that not every DSP chip is described as one--when it's placed on an ASIC, for example--nevertheless the DSP market continues to explode. In the mobile and smart-phone segment, which represents almost two-thirds of the market for DSP chips, the future remains bright, according to IT research group Gartner Inc. Worldwide mobile-phone shipments last year totaled 816 million, and they are forecast to jump to 956 million in 2006, with 2007 estimates reaching 1.03 billion. Smart phones, outfitted with operating systems, offer DSP suppliers expanding opportunities as well. "The smart phone segment is still growing over 60 percent this year (to more than 80 million units in 2006 and over 130 million units in 2007), which is good news for Texas Instruments, because the Dallas-based company supplies its Omap chips to most of the smart phone and cellular PDA vendors," said Todd Kort, principal analyst at Gartner. Will Strauss, principal analyst at Forward Concepts, said the second-largest DSP market, after cell phones, is disk drive controllers. "Last year, 300 million disk drives and disk drive controllers were shipped, all of which are DSP-based," he said. "By comparison, only 200 million PCs, laptops and desktops were shipped."
Embedded DSPs While competition is fierce, as recently demonstrated by Intel Corp.'s decision to sell its communications and application chip business for about $600 million to Marvel Semiconductor Inc., other DSP chip makers have fared better. In the smaller general-purpose programmable DSP chip market, Forward Concepts research shows that Texas Instruments, Freescale Semiconductor, Agere Systems, Analog Devices and NXP Semiconductors (formerly Phillips Semiconductors) are the top five companies, in that order. Texas Instruments Inc. has continued to lead in programmable DSP chips, having posted a 58.3 percent market share in 2005, a 14 percent increase year over year. Freescale Semiconductor, at 14.1 percent, is in second place. To keep its position, Joseph Rigazio, general manager for TI's catalog DSP and emerging end-equipment business, said the company is working on several fronts--from continuing its R&D commitment to using venture capital to stay ahead of emerging technology, as well as delving more deeply into the embedded arena and working with the current trends of convergence and customization. As convergence continues, the need to transmit voice, video and data seamlessly is critical, he said. So is the need to work on the infrastructure that will allow for trans-code, which converts a media file from one format to another. Problems have arisen with some portable video players in MPEG-4 formats, which have had trouble being converted to an H.264 format. Since transcoding is DSP-centric, that process helps to push convergence as well as DSP technology. Another example is the set-top box that handles MPEG-2, which sits on the TV. When the box is plugged into the Internet, it connects with several formats, including MPEG-4, H.264 and WMV9. "That set-top box better be flexible and better handle it," Rigazio said. "In the last two years, many OEMs were trying to make their products even more flexible to handle all of this. Again, very DSP-centric, but they need much more flexibility than hardwired solutions of the past." On the customization front, Freescale Semiconductor is designing an internal architecture and enhancing performance, footprint and interfaces that are tailored to meet market needs at the right price.
Derivatives for different markets "This approach, in addition to internal 'off-the-shelf' available blocks that fit the different process technology nodes, enables Freescale to quickly spin multiple devices at lower development costs to meet the different market needs," said Barry Stern, Freescale's multicore DSP marketing manager. The push to contain costs has had other consequences. "First, as the cost of IC development has risen, we have established much tighter links with our customers to define our product road maps. Second, we have continued to evolve our software ecosystem, both with Freescale-developed software and with strategic alliances with third parties, such as Dolby and DTS," said Ken Obuszewski, Freescale's digital audio and radio operations manager. Over at Analog Devices Inc., the company continues to push its DSP processors for specific markets. The Blackfin, for example, works well in the video market, while the Sharc fits into audio processing. Products aside, Bill Gotschewski, director of marketing for the convergent processing systems group at ADI, said that to compete in an environment of shorter development cycles, DSP suppliers must respond to end-customer demands quickly, and that requires working with companies whose technology can make the difference. "What chip companies have to do is develop the collaboration with creative third parties who have very exciting offerings and are very tuned at developing business models that can get products to market quickly," Gotschewski said. TI's Rigazio said his company is looking for companies that offer technology that will add to its differentiation beyond silicon. "Recently, we have focused on the video segment to find companies with advanced software IP [intellectual property]. We are also partnering with more third parties to co-develop products than we have in the past," Rigazio said. As digital signal processing attracts new programmers, the demand for powerful, easy-to-use tools continues to rise. Rigazio noted that his company recently licensed its written application software to a broad set of customers. The code, sold via third parties called authorized software providers, is designed to meet the needs of engineers by allowing them to focus on product differentiation instead of development and debugging of popular standardized software components. "This saves time and allows engineers to add more cool new features into their product," Rigazio said. In the meantime, convergence is ushering in new products that are keeping DSP providers on their toes "to find that next killer market," said Gotschewski. One example is music and cell phone voice signals. In October, Agere Systems Inc. introduced its X125 platform, featuring chips, software and a development kit, for Edge cell phones. The platform, based on Agere's DSP technology, enables CD-quality music on an entry-level cell phone--an industry first, the company said. "This means you can buy a cell phone using this platform that offers you iPod-quality music and can store hundreds of songs," a company spokesperson said. Agere is also working with cell phone customer design engineers to offer music of CD quality while maintaining high voice quality. Forward Concepts predicts that the DSP chip market, which is expected to post a healthy 15 percent market revenue growth in 2006, will benefit from a revival in the hitherto lackluster telecom market as new voice-over-IP equipment replaces the traditional circuit-switched public telephone network later in the decade. In addition, DSP chips will undergo a transformation during the next four years, as suppliers introduce chips based on multiple computing engines. We'll also see more single-chip devices that include combinations of RISC controllers and DSP engines. Forward Concepts also foresees cheaper DSP chips, priced below $1, as DSPs further infiltrate the market in toys, household appliances and automotive applications. "Without DSP, there would be no multimedia future. Things can only get better for DSP providers. Stay tuned," Strauss said. Nicole Lewis is a Miami-based business and technology writer. She can be reached at Lewis_nicole@bellsouth.net.
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