IBM Corp is paying $180m for wireless semiconductor company CommQuest Technologies Inc to vault it into the market for next- generation devices which will combine email, phone, internet access and global positioning functions. IBM expects CommQuest to generate $1bn new revenues for it by 2002. IBM Microelectronics, where CommQuest’s 215 staff, most of them engineers, will be housed, will build CommQuest’s designs in SiGe silicon germanium using its CMOS 7S copper process. IBM says it’s getting around 100 starts of the SiGe process per day at its Burlington, Vermont fab and expects to ship production quality parts by mid-year in sizes between 0.22 and 0.25 microns. IBM has eschewed GaAs gallium arsenide technology in favor of SiGe for next generation low-power ASICs and semiconductors claiming chips using it are two or three cheaper to produce and can accommodate more transistors. IBM says it needed to make only small changes to its regular CMOS process to produce SiGe chips at speeds up to 100GHz and can get the same yields from the process as it does for other chips. GaAs manufacturers earlier this week cut prices of their chips to between $7 and $10. CommQuest already designs a range of chips for a ‘worldphone,’ all-band GSM mobile phones, CDMA and global positioning devices and other wireless systems. Its next- generation designs will be integrated ‘system-on-chip’ parts for processing mixed digital and analog signals, essentially programmable ASICs. It’s waiting for TDMA standards to emerge before building parts for that wireless market. IBM Microelectronics will supply the technology to other Big Blue divisions – though didn’t say whether IBM itself will brand the multi-application devices – but its main revenue will come from OEM sales, which are currently around $3bn. IBM’s only previous interest in the wireless market has been selling foundry services to the likes of Nortel and Hughes. IBM won’t be developing and selling voice handsets using the CommQuest intellectual property. IBM says it expects to press SiGe into use in more mainstream processors in future. It thinks SiGe will extend Moore’s Law so that it applies when transistor sizes reach 0.1 microns and below. All of CommQuests chip designs will be fabricated by IBM. IBM will take a one-time charge in the quarter the deal closes.
