Amazon Negotiating purchase of TI Mobile CPU Division

[exar333]

VERY interesting development:

http://www.dailytech.com/article.aspx?newsid=27937

Excerpt from article:
Amazon has become one of the biggest companies in the tablet market with its Kindle Fire and the new Kindle Fire HD tablets. With Amazon wanting to put pressure on Apple in the tablet market, it would make sense for the company to work on securing processors for its future assault.

Reuters reports that Amazon is in talks with Texas Instruments to purchase its mobile processor line. If the negotiations are successful and Amazon acquires the mobile processor line, it would make the online retail giant a direct rival to Apple and Samsung Electronics. Apple and Samsung Electronics are two giants in the smartphone and tablet market that also design their own chips.

 

[videogames101]

well that was unexpected

 

[dma0991]

Its only a matter of time before Google decides to joins the party of acquiring and developing their own custom ARM chip.

 

[exar333]

With profit margins so small, eliminating as much of the 'profit' from outsourcing design and fab is critical.

This article interested me because I don't think most people would think of Amazon as a 'builder' of goods. Even recently, they have been involved in some design work, but that has been pretty limited to tablets and e-readers. Unexpected, but not surprising.

 

[blckgrffn]

Personally, I was waiting for this thread so IDC could chime in

It is pretty interesting to watch these companies scramble to vertically integrate. What might be interesting to watch for is a fragmentation of the ARM ISA as these guys try to get a leg up on one another via silicon, seeing as they can't really compete based on fab technology.

 

[exar333]

Personally, I was waiting for this thread so IDC could chime in

It is pretty interesting to watch these companies scramble to vertically integrate. What might be interesting to watch for is a fragmentation of the ARM ISA as these guys try to get a leg up on one another via silicon, seeing as they can't really compete based on fab technology.

Exactly.

It's a whole different market now. It used to be that the chip makers, system builders, software makers, and internet service providers were ALL distinct and vying for business. Now that is all integrating vertically as well as horizontally into a single company from design, fab, software, to end-user product. Not sure how I feel about this yet, but it remains to be seen.

If it was difficult for new players to get into any one of those markets before, it will be EVEN more difficult now...

 

[Arkaign]

I live about 15 minutes away from TI's absolutely massive Dallas facility, I wonder if this would affect that location?

 

[joshhedge]

Its only a matter of time before Google decides to joins the party of acquiring and developing their own custom ARM chip.

Imagine a G4,G5,G5X lineup, that would be quite funny.

On another note, It would be interesting to see if Qualcomm tries to enter the consumer market space, rather than just making developer devices.

 

[Idontcare]

I live about 15 minutes away from TI's absolutely massive Dallas facility, I wonder if this would affect that location?

You talking about the north campus on the NE corner of the intersection between LBJ and central expressway? Or the south campus down on Forest lane?

The OMAP design engineers were predominately officed on the south campus, so if those engineering jobs are being transferred to Amazon as part of the deal then I imagine a few hundred (maybe a thousand?) jobs will be shifted.

The actual hardware, the chips themselves, are manufactured on the north campus in DMOS5 and DMOS6 fabs but they are also outsourced to the UMC and TSMC foundries. (older gen parts like 65nm are even outsourced to GloFo via their Charted Semiconductor acquisition).

So there is a chance that the fab volumes on the north campus could decline as well because the chips were always cheaper to produce and purchase from the foundries versus producing them internally in our own fabs (that is partly why we abandoned node future development at the 45nm node and now all 45nm and more modern IC's from TI will be made in a foundry).

I doubt any of the employees who are involved in OMAP design per se will be geographically impacted. When TI divested itself of its defense industry business we sold a bunch of IP and products to Raytheon and L3, as well as transferred employees in the process, but we did by way of literally transferring the office building itself, lock stock and barrel.

Raytheon for example leased the north building on TI's north campus where they continued all the ongoing defense work without missing a step. Literally the business just came to be under new management.

Amazon would probably want something like that, at least in the short term, to minimize the disruption to the workforce and existing product timelines.

...OR it could end up being negotiated much like Apple's acquisition of PA Semi (small world, TI was PA Semi's foundry at the time Apple bought them) where they moved that entire business entity geographically to better internalize it into the ways of Apple culture and so forth.

Either way this works out better for the people involved IMO. TI doesn't want to invest in the digital CMOS circuit design market, so its current employees who do that for TI are better off getting a paycheck from an employer that sees them as an opportunity and not just costly baggage that management wants to offload. Morale will probably improve, as will the bonus structure and motivation outlook.

 

[OBLAMA2009]

this is a stupid idea. ti mobile is getting shut down because they cant compete with qualcomm. amazon thinks it can make it profitable by designing chips for only one company?

 

[Arkaign]

Very interesting info IDC! I was just concerned, as I have a good number of aquaintances and colleagues who either work or have worked for TI in the area, good to know that it sounds neutral/positive overall.

 

[dma0991]

this is a stupid idea. ti mobile is getting shut down because they cant compete with qualcomm. amazon thinks it can make it profitable by designing chips for only one company?

While it is true that they're not competitive enough but having used several smartphones with TI chips in it, they're not bad and no slouch either. Makes me wonder why Google wanted a TI chip in the Galaxy Nexus when it could use Samsung's Exynos chips instead.

This isn't Amazon's attempt to revive a dying division. Amazon is acquiring the technical know how on developing their own mobile chips. It would soon be integrated into the Kindle lineup. TI's mobile division makes a profit if Kindle products are successful. At the end of the day, Amazon is selling you a finished product(tablet/smartphone), not a SoC.

 

[Idontcare]

this is a stupid idea. ti mobile is getting shut down because they cant compete with qualcomm. amazon thinks it can make it profitable by designing chips for only one company?

Its not quite like that, which is why it doesn't make sense to you at first blush.

TI mobile is getting shutdown because years ago, around 2007, TI started pulling back (intentionally) on their investments into this product line. It wasn't viewed as being a strategic core business anymore, so it was deprioritized (but still funded) and R&D dollars went to other higher priority items on the agenda (such as acquiring National Semi).

In the hands of a company that was compelled to prioritize its further development and resource it so that it stood a chance to be competitive, there is no reason why the OMAP lineage to come would not serve Amazon well.

 

[WhoBeDaPlaya]

I live about 15 minutes away from TI's absolutely massive Dallas facility, I wonder if this would affect that location?

Wow, Forest Lane? Didn't know you where that close

 

[ehume]

The take from the Register, here.