Infineon bids to dominate ultra-low cost market
Published: 21 January, 2009
Infineon gained most headlines last year for its 3G integrated chipset, which is used in the iPhone, and recently hinted at a 4G version to be demonstrated at Mobile World Congress in Barcelona next month. But the core of its business, including its important supply deal with Nokia, lies in low cost handsets, and its MWC outing will also see its latest ULC (Ultra Low Cost) handset platform.
The ultra-low cost handset (ULCH) segment is expected to sustain growth throughout the recession because of the booming uptake of mobile services in developing economies, although a shift to this market will wreak havoc on the margins of some phonemakers, as it did for Motorola in 2007. Succeeding in the baseband market for GSM and ULCH phones will be a business of scale because of the razor thin margins, and just one or two suppliers stand to survive. Infineon is determined to be one, and provided its relationship with Nokia prospers, it has a good chance, especially with Texas Instruments backing away from cellphone basebands and its LoCosto ULCH system.
In Barcelona, Infineon will apply its expertise in highly integrated, single-chip solutions - an area where it is taking on Qualcomm - to low cost devices. The XGOLD110 is an update to the current XGOLD101/102 products, and adds support for color displays, MP3 playback, USB charging and an integrated FM receiver. Infineon also offers the XMM110 reference platform, based on XGOLD110, which the chipmaker claims reduces the bill of materials for a low end phone by 20% compared to the older designs, and to cut the design cycle to 3-4 months. Infineon is also addressing its cost base by outsourcing the manufacturing of the new chip, as part of a general decision to outsource any devices produced in 65nm or less. The new offerings will be available in the second quarter and in volume in Q3.
Meanwhile, Infineon says it has shipped its 100 millionth low cost chipset. "Our sales figures in the ULC segment are a testament to the success of our highly integrated solution," said Professor Hermann Eul, board member responsible for technology, sales and marketing, in a statement. The XGold chips combine baseband, transceiver, power management and memory, to reduce total component count in a simple handset from about 200 to about 50.
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