NEC and Toshiba have announced plans to license MIPS Technologies' next-generation embedded processor technology, a sign that major Japanese chip makers see a future flush with set-top boxes, Internet appliances and low-powered computing devices.
The deal, which includes a 10-year commitment to MIPS by the Japanese vendors, comes at an important time for the California-based company. The Silicon Graphics (SGI) affiliate is emerging from a difficult year in which its business saw only modest growth compared to the embedded market as a whole.
The new licences are for MIPS' next-generation 64-bit RISC (reduced instruction set computer) core, code-named Ruby, which is scheduled for introduction later this year. Aimed at the high end of the embedded market, Ruby was designed for use in consumer products like set-top boxes and video games, as well as in handheld computers, printers and networking products like switches and routers, MIPS officials said.
Under existing licences with MIPS, both Toshiba and NEC already make chips based on the US company's technology. NEC produced over 50 per cent of all MIPS chips on the market. The new licence is a sign of the vendors' confidence in the MIPS architecture, officials in Japan said.
"We are in the MIPS camp," said Koichi Suzuki, vice president, group executive of Toshiba's semiconductor group. The Toshiba's TX family of processors - the 19, 39 and 49 - use the MIPS technology, he said.
"We already use a MIPS' 64-bit core, but Ruby is a more advanced architecture," said an official at NEC, who asked not to be named. NEC expects to ship products based on the chip by the end of next year, he said.
Commitment to MIPS
"This really does represent a commitment to MIPS that's stronger than any (Toshiba and NEC) have made in the past, simply because it's a commitment to a separate, stand-alone company," said John Bourgoin, chief executive officer of MIPS.
MIPS received a blow last year when SGI announced it would begin using competing processors from Intel. Historically, MIPS-based processors formed the heart of SGI's high-end workstations. SGI owns about 85 per cent of MIPS' common stock, but the systems vendor has said it will gradually divest itself of the subsidiary by October 2000.
MIPS is also battling to improve its sales, which last year increased by only 4 per cent, to about 50 million units. By contrast, sales of rival ARM (Advanced RISC Machines) processors grew by a factor of five, to around 48 million units in the same period, MicroDesign Resources said.
Bourgoin attributed MIPS' slower growth rate to flattening in the video games market, where MIPS had made significant gains in 1997.
In addition, ARM made substantial headway in the cellular phone market, where MIPS does not compete, he said.
Ruby will round out MIP's offerings with a high-end processor design that will assure its continued growth in the future, Bourgoin confidently predicted. Some of that growth will come from emerging markets for consumer applications like set-top boxes and Internet appliances, where Ruby's high performance and low cost will make it a formidable player, Bourgoin said.