The crop of baseband chip suppliers that emerged around WiMAX was overdue for a shake-out, and that process is now underway. Broadcom bought Beceem last year, and Intel acquired Comsys Mobile. Now Wavesat has been snapped up too, in a surprise move by network processor firm Cavium.
The fit between a specialist in basebands for 4G devices and a supplier of carrier grade network processors is not obvious, but Cavium is given to making offside acquisitions to increase its differentiation in the increasingly standards-based world of operator infrastructure. In November 2009 it bought Mobile Linux firm Montavista, another company traditionally focused on devices, but it brought its new parent a boost for its own Carrier Linux activities – as well as countering Intel’s purchase of Wind River.
In Wavesat’s case, Cavium is paying $10 million in cash not for its basebands, but for the digital signal processing expertise it has in OFDMA-based technologies — WiMAX, LTE and Japan’s XGP. The larger firm says it can harness this expertise in all its business segments, mainly wireless infrastructure but also broadband and consumer processors. This indicates the pressure on Cavium to broaden its product range and push the boundaries in network processors, a sector in which Freescale has become very competitive again in recent months with its StarCore DSP architecture. Freescale has also been building up its software expertise to offer an alternative to Intel’s Wind River — in May it announced partnerships with embedded software houses Enea Systems, Green Hills Software and Mentor Graphics.
Wavesat was an early-mover in WiMAX and was one of the first players to see the vital importance of building strong ties with the Taiwanese ODM community to extend the standard’s ecosystem. However, it was overshadowed in WiMAX products by Beceem and Sequans, in particular, as well as Intel on the laptop side. Following the purchase of Beceem, Sequans and Altair are now the most prominent independent 4G baseband specialists. Both have expanded their architectures to LTE and taken part in trials, such as Sequans’ in China and Altair’s with O2.
In August, Wavesat released its own LTE product, announcing a tri-band reference design for handsets, dongles and CPE equipment. This was based on its Odyssey 9000 silicon platform, which also supports WiMAX and XGP.
Cavium also announced another acquisition: Celestial Semiconductor was acquired for $55 million in cash and new shares. Celestial provides system-on-chip solutions geared to HD video processing. These have been adopted in set-top boxes and other devices in China and some emerging markets and will complement Cavium’s own PureVu line of video processors.
Video is an important part of the Cavium strategy since it has greater growth potential than its core business. In its recent Q4 results, it reported 86% year-on-year revenue growth to hit $60 million, but network processor chip sales were down 2% sequentially because of inventory adjustments by enterprise customers and Cisco, and it also expects some slowdown in its broadband segment.
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