1999-10-09 , ESC9989
Business News From Philips Semiconductors

With access to VLSI's advanced baseband technology Philips Semiconductors now has 100% of the competencies in-house to create the next generation of data-centric handset solutions

By acquiring VLSI Technology (San Jose, CA, USA), Philips Semiconductors, the largest European semiconductor manufacturer, has added powerful new baseband solutions to its already extensive portfolio of mobile telecommunication products, giving it access to advanced IP in 100% of the key technologies required to bring about the convergence of digital wireless communications and consumer products. By leveraging VLSI's extensive experience in fast turnaround ASIC design and manufacture, Philips Semiconductors will also be able to offer the rapid customization services needed to give its telecommunication customers competitive advantage and extremely short time-to-market for new product designs.

"The combined strengths of the two companies bring together all the key technologies required to create the new generation of data-centric mobile communications products that will bring services such as mobile Internet and personal multimedia to consumer mass markets," said Thierry Laurent, Managing Director of Philips Semiconductors' Telecom Terminals Business Unit. "Our unique combination of IP blocks, process technologies and manufacturing resources, together with our real application experience, put Philips Semiconductors in a great position to lead the field in supplying silicon system solutions for a handset market that is expected to grow by more than 360% over the next three years."

Notable additions to Philips Semiconductors' wireless data capabilities that are being highlighted at Telecom '99 include its new Bluetooth and GPRS (General Packet Radio Service) solutions - two key elements in bringing wireless LAN and global network connectivity to mobile applications in advance of 3G systems. Coupled with RF and baseband solutions for all the major mobile systems currently in operation around the world, including GSM, TDMA, CDMA, DECT and IMS, these advanced data communications solutions from Philips Semiconductors will allow manufacturers to produce the new multi-band multi-mode handsets required for truly global roaming, messaging and information highway access.

The Philips Semiconductors/VLSI merger not only makes Philips one of the world's top three companies in handset semiconductors. Its components division also contributes advanced new integrated component solutions to the total package, such as surface-mounting ceramic antenna that are no larger than a standard IC, and chip-scale ESD/EMI protection products. This makes Philips a true one-stop source for handset solutions, giving customers the benefits of simpler logistics and guaranteed component inter-operability.

According to Peter Baumgartner, Director of the Global Market Segment Communications within the International Marketing and Sales organization of Philips Semiconductors, the important message for existing Philips and VLSI customers is one of continuity of supply for the solutions they are using today.

"There will be no rationalisation of our existing product portfolio by deleting current Philips or VLSI products," he said. "In fact the pace of change is so fast in the telecommunications business that we will only merge the two companies' roadmaps for future product developments, combining our different expertises to create highly optimised new solutions in our soon to be announced Telecom Terminals Platform."

The merger of VLSI and Philips Semiconductors further enhances Philips' position as one of the top-tier companies in the multi-billion dollar worldwide market for wireless semiconductors.

"Based on Dataquest's 1998 figures for the individual companies, the merger makes us the world's second largest supplier of GSM baseband solutions and the third largest supplier in the overall baseband market," said Thierry Laurent, "which together with our existing number one position in RF for subscriber devices, makes Philips Semiconductors the world's third largest semiconductor supplier to the telecoms industry."

However, Laurent believes that being one of the biggest companies in the business is only part of the story. "Having 100% of the key wireless competencies in-house is also a critical factor," he says, "enabling us to drive technology standards and ensure our customers have access to the very best technologies needed to get advanced new products to market more rapidly than ever before."

The combined customer base of the two companies now means that virtually every mobile phone manufactured in the world contains components supplied by Philips.

Philips Semiconductors, a division of Royal Philips Electronics, headquartered in Eindhoven, The Netherlands, is the eighth largest semiconductor supplier based on Dataquest's 1998 report (*). Headquartered in Eindhoven, The Netherlands, the company's innovations in digital audio, video, and mobile technology position it as a leader in the consumer, multimedia and wireless communications markets. Its recent acquisition of VLSI Technology (San Jose, California, USA) further enhances Philips Semiconductors' position as one of the world's leading suppliers of handset solutions for digital cellular and cordless telephone systems including GSM, CDMA, TDMA, DECT, ISM, GPRS and Bluetooth. In addition to these digital system solutions, Philips Semiconductors also produces ICs for wired and analog cordless telephony and paging. The company's activities are supported by sales offices in all major markets around the world, and by systems labs. Additional information on Philips Semiconductors can be obtained by accessing its home page at  www.semiconductors.philips.com.

* Based on Vendor Revenue from Shipments of Total Semiconductors Worldwide according to Dataquest's 1998 Worldwide Semiconductor Market Share report published in May, 1999.