The development is what Darren Hobbs, director of product marketing for the silicon business unit at S3, calls private labeling. The first such product is likely to be a high-speed digital-to-analog converter (DAC) that S3 has offered as an IP core.
"We provide the design and our customer would brand and sell the IC," said Hobbs. "It's a high-speed DAC suitable for wireless infrastructure applications, satellite communications and so on. It runs at 1-gigasample per second and about 14-bit resolution," Hobbs explained.
But if there is a market for such a discrete DAC why doesn't S3 move up from being an IP provider and keep all the sales revenue for itself?
"In the discrete analog and mixed-signal market it is very much about branding," Hobbs explained. "There are leaders such as Analog Devices, Texas Instruments, Maxim Integrated and so on. They are making tremendous revenue on parts that sell at $20 and more but occupy little die area in mature processes. There are massive margins so there is opportunity for competition but it is hard for a startup to run against them. Look what happened to Touchstone. It wasn't the products that were the problem. It was the brand." (See Silicon Labs pays $1.5 million for Touchstone).
"However, for somebody already in the analog and mixed-signal market that is already delivering to customers, we can provide the IC with a proven reference in silicon. When we hand over the design it would have been made in a foundry probably in 0.18-micron CMOS, but it could be 0.13-micron or 90nm. All the vendor has to do is move it through the sales channel."