AMD Seeks Wi-Fi Alchemy

By Ed Sutherland

November 25, 2002

Is Advanced Micro Devices' new Alchemy wireless LAN (WLAN) chipset the key to turning a leaden semiconductor market into Wi-Fi gold?

Is Advanced Micro Devices' (AMD) new Alchemy wireless LAN (WLAN) chipset the key to turning a leaden semiconductor market into Wi-Fi gold?

The announcement of AMD's Am1772 chipset and a design kit for a Wi-Fi adapter card quickly followed reports rival Intel was also jumping head-first into the red-hot market for embedding Wi-Fi functionality in everything from PDAs, cell phones and laptop computers.

With AMD's announcement of WLAN chips in the first quarter of 2003 and Intel releasing its WLAN-centered Banias chip early next year, chipmakers are showing increasing interest in the Wi-Fi market.

Wireless Leads Chip Rebound

Why the interest in 802.11 technology from silicon giants? Part of the answer is found in a forecast from the Semiconductor Industry Association (SIA) trade group. After a downturn in the demand for personal computers and their semiconductor brains, the SIA says good news is on the way with a double-digit increase in sales over the next three years.

Assisting in the recovery are chips used to power the growing number of wireless products. From new 3G phones, networked PDAs and wireless access to the Internet, demand for mobile chips is an important segment of a growing semiconductor market, says SAI President George Scalise.

Digital Signal Processors (DSPs), the chips required to quickly manipulate graphics and sound, are slated to see sales jump 33 percent to $6.5 billion in 2003. Flash memory, found in everything from digital cameras to the WLAN products offered by AMD and Intel, are expected to grow 39 percent to $11 billion in 2003.

Chips designed specifically for Wi-Fi products are expected to experience less dramatic growth, according to the SAI.

$600M Wi-Fi Chip Market

"The market for Wi-Fi ICs (Integrated Circuits) is projected to grow from $244 million in 2001 to more than $600 million by 2005," says Molly Tuttle, a spokesperson for SAI.

The AMD chipset "will be AMD's bold first step into the wireless market, and the first of several wireless products we plan to introduce over the next 12 months," said William Edwards, AMD's vice president and general manager of the company's Personal Connectivity Solutions (PCS) group.

Many of those leading the PCS group are from AMD's new Alchemy division. In February, AMD purchased the Texas-headquartered Alchemy Semiconductors, a company that specialized in energy-efficient MIPS-based chips that compete against ARM, the leading processor used in cell phones.

The Wi-Fi Alchemy

Alchemy Semiconductors was founded by Rich Witek and Greg Hoeppner, designers who were in charge of Intel's StrongARM program.

Although the group will release its initial chips -- the Au 1000 and Au 1100 -- for the residential gateway and consumer electronics market, the PCS unit is now concentrating on Wi-Fi chips.

The Alchemy chipset targets system manufacturers interested in embedding Wi-Fi functions into laptops and other mobile computers needing a low-power solution.

Another reason for AMD's entry into the Wi-Fi market is to strengthen its flash memory arm, a leading unit of the chip maker. In announcing its WLAN chipset, AMD said the Am1772 would include on-board flash memory. AMD recently unveiled its MirrorBit technology, boosting the ability for flash memory to hold twice as much information for a number of devices, including cell phones.

AMD's chip announcement came days after Intel outlined its own roadmap for the Wi-Fi market. After announcing it will invest $150 billion in Wi-Fi startup companies, the chip-making giant told reporters the wireless technology would become ever-present with a future of roaming Wi-Fi users and 90 percent of laptop users having 802.11 capabilities.

Allen Nogee, an analyst for the research firm In-Stat/MDR sums it up by saying, "I think wireless is very important to chipmakers. Do you know any that aren't involved in wireless in some way? I don't."

802.11 Planet Conference Want to get hold of some of that Intel Wi-Fi investment money? We don't have any, but join us at the 802.11 Planet Conference & Expo, Dec. 3-5 in Santa Clara, CA. One of our sessions will cover Funding for 802.11: Info for Investors and Vendors and features a speaker from Intel Capital.



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