Combination ICs - Cheap As Chips?

­In a time where cellular handset manufacturers and IC suppliers alike are fighting to maintain profit margins, whilst enhancing the competitiveness of their offerings, the use of combination ICs is an increasingly popular option. This is set to continue says IMS Research, with growth of combination wireless ICs forecast to increase at a CAGR of nearly 30% between 2008 and 2013.

Combination ICs can offer cost savings of 20-40% over the use of numerous standalone wireless ICs (dependant on the wireless technologies in question, the volumes being shipped and the level of integration). So are these ASP reductions solely responsible for the rise of combination ICs?

In the cellular handset environment, device convergence and emerging use-cases for wireless technologies are also driving the demand for wireless combination ICs. As well as significant cost savings, using a combination IC in a cellular handset instead of numerous standalone wireless ICs enables smaller form-factors, without the co-existence issues commonly associated with the use of multiple radios.

In general terms, the more radios there are in a handset, the higher the battery drain. Through integrating multiple technologies on a single IC, the sharing of some functions can reduce the power consumption. This is especially vital with the increased demand for power-hungry use-cases, such as mobile browsing and file downloading. A key trend expected to affect mobile network operators is the drive to monetise content in order to increase ARPU (average revenue per user). This places more pressure on IC suppliers and handset manufacturers alike to reduce the power requirements of the technologies used to provide these services.

Another factor driving the use of combinations ICs in handsets is the developing maturity and increasing attach rates of certain wireless technologies in cellular handsets. This in turn is helping to determine which wireless combinations make economic sense for IC suppliers and handset manufacturers. So, what is stopping combination ICs becoming ubiquitous across all cellular handsets over the next few years? A key reason is that a significant volume of cellular handsets, such as those classed as ultra-low-cost (ULC), are aimed at segments that still do not include multiple wireless connectivity features, beyond basic 2G/3G cellular network capabilities. This is because the inclusion of ICs with multiple wireless functionality, though cheaper than multiple standalone ICs, is still too expensive and not required for the basic features and functionality ULC handsets are designed for.

At the opposite end of the scale, some handset segments require the latest, greatest versions of wireless technology standards. This can be a challenge for OEMs choosing to integrate combination ICs due to: different technologies maturing/requiring an upgrade at different rates; potentially longer design cycles; a longer testing phase; and the time it takes to achieve certification for all wireless technology standards included on the chip. Additionally, the segment requiring the latest technology may be relatively small. Hence it can make more sense to utilise existing solutions for the more common technology which is included in a high proportion of cellular handsets (such as classic Bluetooth), taking advantage of economies of scale benefits; This can then be supplemented with the addition of a standalone 802.11n IC for the highest tier segments, as opposed to investing in Bluetooth/802.11n combination ICs which are only required in a relatively small volume of handsets.

This is not to say that 802.11 does not have a place in cellular handsets - existing products such as the Apple iPhone have proved that there are popular use-cases that demand this. However, the majority of users are happy to utilise earlier versions of 802.11 standards, such as b/g, with only a relatively small proportion demanding the recently ratified 802.11n.

Combination ICs are clearly staking their claim on the cellular handset market. While price reductions do play a key role in the rise of ICs with multiple wireless functionality, it is important not to overlook the other benefits that can be gained from this integration These include silicon 'footprint' reductions and improved co-existence. Yet, despite these factors, there are still issues that will prevent combination ICs becoming ubiquitous across all cellular handsets.

Posted to the site on 2nd November 2009