Flextronics taps ARC core in design services gambit

Flextronics taps ARC core in design services gambit
By Ian Cameron, EE Times UK
November 24, 2000 (11:22 a.m. EST)
URL: http://www.eetimes.com/story/OEG20001121S0075

MUNICH, Germany — Flextronics Semiconductor, the chip-making division of contract manufacturer Flextronics International, has licensed the microprocessor intellectual property of ARC Cores. The companies are to jointly develop and market yet-to-be-identified products for customers in the communications sphere, which will be built by Flextronics.

The ARC license will help drive the contract manufacturer's aggressive bid to increase its design services business over the next year.

"We are going to identify four or five key applications within communications to create some recognizable intellectual property implemented in a demonstration board — probably in six months," said Ralph Waggitt, vice president of marketing at Flextronics' chip arm, formerly named Dii Semiconductor.

Waggitt cited voice-over-Internet Protocol and Internet access devices as potential applications.

Flextronics plans to approach its existing customers — ; which include Ericsson, Motorola, Siemens and Alcatel — with the product. "Initially [it will be] an FPGA implementation, followed by a Flextronics Semiconductor implementation in four to six months," Waggitt said.

"The key thing is that ARC has a partner that can provide us access to manufacturing and technical capabilities — Flextronics has the system design experience," said a spokesman for ARC Cores.

The partnership "provides [Flextronics] access to microprocessor technology and related tools necessary for system-on-chip," the spokesman said.

Financial details of the deal were not released, but the spokesman said it involves "a license fee, then design and royalties once manufacturing starts."

Flextronics International typifies a trend by contract electronics manufacturers (CEMs) to build but also to design products for their OEM customers.

Speaking at the giant Electronica show here this week, Nicholas Brathwaite, senior vice president and chief technology officer at Fl extronics International, said that CEMs' design capabilities "are not going to stop anytime soon. We are growing design services quite significantly over the next 12 months. I would expect us to at least double or maybe even triple [our involvement]."

That rise will be in terms of both people and revenues, he said, though he refused to specify numbers.

Brathwaite said Flextronics' involvement in design services today is "relatively small by Flextronics' standards, but big by design house [standards]," employing about 650 people.

Roughly 30 percent of total company revenue is currently derived from products on which it has performed some design work, he said, but that figure could hit 60 percent over the next few years. Brathwaite cited the cell-phone business as a target for design services.

Ian Cameron is the business editor of Electronics Times, EE Times' sister publication in the United Kingdom.

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