TI Home 
Search Feedback 
Semiconductor Home
3/95
When a business agreement is based on a thorough understanding of needs and expertise, the venture should be prosperous. Since 1987, telecommunications giant LM Ericsson and chip supplier Texas Instruments (TI) have built a mutually supportive relationship in which both companies are flourishing.
Ericsson has a worldwide leadership position in cellular infrastructure equipment, including base stations (transmission towers) and telephones. The company holds a healthy percentage of the U.S. market for cellular systems. In addition, it has won a substantial share of the digital cellular equipment orders as well as the combined analog and digital cellular equipment sales in Europe. Ericsson expects the number of cellular subscribers worldwide to increase from 32 million now to about 150-200 million by the year 2000, of which 26 million are using Ericsson systems.
Digital signal processors (DSPs) -- high-speed microprocessors that are 10 to 50 times more powerful than general-purpose microprocessors, other chips-manufactured by TI, have been the technology enabling many of Ericsson's advances. As the world's leading provider of digital signal processing solutions, TI has worked extensively with Ericsson to provide innovative technological advances to serve the growing demand for cellular phone service.
For example, Ericsson pioneered cellular base stations and telephones with TI DSP-based technology that allows multiple digital signals to be sent over a single channel. This technology increases the number of conversations that can be carried by a user-saturated cellular system, improves voice quality for subscribers and paves the way for additional functionality, such as Personal Communications Systems (PCs). Ericsson's DSP-based technology is the only digital cellular technology providing commercial service worldwide.
The cooperative agreement between TI and Ericsson helped Ericsson achieve an 18-month lead over the industry in introducing the first dual analog/digital mode cellular phones based on emerging U.S. standards. Because TI's DSP solution integrated most of the electronics onto a single chip, the new Ericsson phones were smaller, lighter, less expensive and featured greater functionality and a longer battery life. Meanwhile, the programmability of the DSP technology lets Ericsson easily upgrade its systems to keep pace with the changing telecommunications standards.
According to Gilles Delfassy, TIs Wireless Communications Business Unit Manager, TI enjoys its best customer relationships with those companies that involve IT early in the product development cycle. This allows the joint development of specific technologies that enable TIs customers to enter the market faster with their products.
Ericssons $100 million 0.5 micro-facility just outside Stockholm, in Kista, Sweden, is an example of even further cooperation for early use of leading edge technology in telecommunications equipment. The Swedish chip manufacturing facility will use TI technology to produce integrated circuits for use in Ericsson products and systems, from telephone switches to cellular phones. The 70,000-square foot plant will have an initial production of 10,000 six-inch wafers per year.
"We are building our own chip prototyping plant to test new circuits quickly and shorten development times for both circuits and semiconductor technology," said Bo Hedfors, president and chief executive officer of Ericsson Inc.
"Having a customer build its own chip prototype plant using our technology represents a tremendous opportunity for TI to expand our knowledge of the growing telecommunications industry," Delfassy said. "In addition, by developing prototype products based on TI production standards, it makes it easier to ramp up volume production of Ericsson's products in TI's fabrication facilities. This should provide Ericsson a significant advantage when trying to meet new product introduction windows.
"In return, Ericsson is gaining intimate knowledge of the semiconductor business, which will be instrumental in our new product development efforts," Hedfors said. "Already, TI has trained more than 25 Ericsson employees in the engineering and manufacturing skills necessary to help us capitalize on all aspects of this technology."
The plant is expected to produce product quality semiconductor chips by July 1995.
"We know that a wafer production facility will give us a tremendous marketing advantage when we approach the emerging telecom growth markets of Eastern Europe and China," Hedfors concluded. "And TI's DSP solutions will be instrumental in helping Ericsson develop new technologies to meet these markets' needs."
# # #