Mark LaPedus

EE Times

(04/26/2006 1:03 PM EDT)

NAPA, Calif. — Samsung Electronics Co. Ltd. on Wednesday (April 26) claimed that the company grabbed a major MP3 chip design win at Apple Computer Inc., at the expense of PortalPlayer Inc.

An executive from Samsung said the company won the MP3 media processor business for Apple’s next-generation iPods. Samsung, along with other vendors, also supplies NAND flash memory chips for the iPod.

It’s a huge win for Samsung—and a blow for PortalPlayer. Last week, PortalPlayer announced that it had not won the media processor design slot for Apple`s next iPod. Before the announcement, PortalPlayer had broadly been considered a lock.

PortalPlayer, which supplies the media processor for Apple’s MP3 lines, saw its stock fall off a cliff following the announcement. The speculation last week was that Samsung, SigmaTel, Actions, and LSI Logic were chief among the chip makers vying for the iPod socket, according to an analyst.

At the SEMI Strategic Business Conference on Wednesday, Samsung disclosed that it won the iPod business. “I knew PortalPlayer would take a dive,” said Jon Kang, senior vice president for the technical marketing group at Samsung Semiconductor Inc. (San Jose, Calif.), the U.S. chip arm of South Korea’s Samsung (Seoul). “I knew that we would win this design.``

Kang referred to the company’s chip as the “PortalPlayer killer.” Samsung’s chip is based on 32-bit processor technology from ARM Holdings plc.

In a brief interview after the presentation, the Samsung executive said the design win represents Samsung’s largest LSI chip order to date. “We’ve been working with Apple a long time,” he said. “It’s a huge win for us.”

He added that Samsung also supplies the “majority” of NAND flash to Apple’s iPod.

Winners and losers

PortalPlayer isn’t the only loser in the MP3 chip market. On Tuesday (April 25), SigmaTel Inc. posted weak results because of “product transition challenges, a soft end market and share losses to low-end competitors,” Craig Berger, an analyst with Wedbush Morgan Securities, wrote in a report issued Wednesday (April 26).

In the MP3 media processor space, SigmaTel competes against Actions Semiconductor, Broadcom, PortalPlayer, Samsung and others.

SigmaTel has garnered design wins for its STMP3600 line of digital media processors with a pair of MP3 OEMS: Creative Technologies and Samsung Electronics, Berger said. But SigmaTel has been unable to garner a design win from Apple, the biggest player in the market, he said. And at the low end, SigmaTel is seeing stiff competition from China’s Actions Semiconductor Inc.

“Market share losses to Actions Semi appear to continue with the STMP3600,” the analyst wrote.