Intel licenses DSP

SAN JOSE, Calif. - Is Intel Corp. re-entering the DSP business?

In a major move, Intel has licensed Ceva Inc.'s digital signal processor (DSP) intellectual property (IP).

Intel has licensed the CEVA-XC communication DSP. Ceva's CEVA-XC is a DSP designed specifically for 4G terminals and wireless infrastructure. It supports multiple air interfaces in software, including LTE, TD-LTE, WiMAX 16m, HSPA+, HSPA, TD-SCDMA, GSM and CDMA.

In the past, Intel attempted to enter the DSP arena. Several years ago, Intel was co-developing a line of DSPs with Analog Devices Inc. (ADI). But those efforts failed to bear fruit and the deal was quietly scrapped.

The Intel-Ceva deal has more questions than answers. ''Very few details were provided in the press release; however, we believe Intel plans to use the CEVA DSP core in future 4G wireless baseband chips,'' said Gary Mobley, an analyst with Benchmark.

''The agreement announced between Ceva and Intel is independent of Intel’s pending acquisition of Infineon’s baseband business, which already uses Ceva’s DSP engines,'' he said in a report. ''Intel, separate from Infineon’s baseband business, is not a significant player in the wireless baseband market. While Intel has been a big proponent of WiMax, Intel is not even a major player in WiMax basebands.''

What are Intel's future plans with the DSP? ''Intel will most likely utilize the licensed CEVA-XC core for LTE (Long-Term Evolution) baseband chip development, and perhaps, future versions of WiMax basebands,'' he said. ''While Intel is a great company to announce as a licensee, Intel’s track record in cellular baseband product development has been spotty. Accordingly, independent of the acquisition of Infineon’s baseband business, Intel’s has not demonstrated that they can be a significant royalty contributor to Ceva.''

In September, Ceva introduced the CEVA-X1643, a 1-GHz DSP core designed to boost overall chip performance for a broad range of applications including wireline and wireless communications, surveillance, portable multimedia and more. The CEVA-X1643 is the latest family member of the widely used CEVA-X DSP architecture, which has been licensed by more than 25 customers and shipped in over 100 million devices to date.

Last month, Ceva introduced the CEVA-XC323, a high performance vector DSP for 4G wireless infrastructure applications. The CEVA-XC323 delivers up to fourfold performance improvement in wireless infrastructure applications compared to incumbent infrastructure VLIW DSPs, such as those offered by Texas Instruments Inc. The CEVA-XC323 is already in design with a wireless infrastructure vendor for 4G Software Defined Radio (SDR) base-station applications.

Also last month, Ceva announced its financial results for the third quarter ended Sept. 30, 2010. Total revenue for the third quarter of 2010 was a record $10.7 million, an increase of 11 percent compared to $9.7 million reported for the third quarter of 2009.

Third quarter of 2010 licensing revenue was $4.5 million, a decrease of 15 percent compared to $5.2 million reported for the third quarter of 2009. Royalty revenue for the third quarter of 2010 was $5.2 million, an increase of 42 percent over $3.7 million reported for the third quarter of 2009.

U.S. GAAP net income for the third quarter of 2010 was $3.0 million, an increase of 71 percent compared to $1.8 million reported for the same period in 2009. U.S. GAAP diluted earnings per share for the third quarter of 2010 was $0.13, an increase of 44 percent compared to $0.09 reported for the third quarter of 2009.