PARIS Philips is on the verge of folding back into its parent organization the company's internally grown Real DSP cores, spun off just two years ago to Adelante Technologies through a merger with Frontier Design, according to industry sources.
The move, when it becomes final, marks the second time in recent months that the Dutch electronics giant has moved to re-absorb a DSP spin-off.
Earlier this year, Philips folded TriMedia Technologies Inc., a separate entity established to license its VLIW-based TriMedia media processor cores to external chip and system companies. Philips shifted its TriMedia technology back into its own semiconductor organization "to keep it alive and move it forward," said Peter Noordam, vice president of business development at Philips Semiconductors.
Sources close to both Philips and Adelante said the decision to roll back Real DSP cores from Adelante is imminent. However, they also said details on what to do with the rest of Adelante's technologies, such as "exploration tools" and application co-processors designed to work with Real DSPs and RISC processors, are still being decided.
Declining to comment on the future of Adelante, a Philips spokesman said, "Under the current economic climate, we are looking at all options at all businesses."
Philips currently owns 92 percent of Adelante.
Karsten Popp, Adelante's chief executive, acknowledged that Philips, which has said it plans to reduce its ownership to less than 50 percent, has been struggling to find "a fair financial deal" for Adelante's technology.
Unhappy with the financial community's valuation for Adelante, Philips last year declined all offers for its spin-off. "Philips did not play 'the game of banks,' at any terms," said Popp.
Philips may be considering several options. One is whether to relinquish total control of Adelante at a rock-bottom valuation and put it in the hands of the fi nancial community for the sake of advancing DSP technology on the open market. It could also try to keep the technology in-house and cater to its internal customers in order to safeguard their future. "Philips is looking at its options," Popp said.
However, at a time when the financial community continues to look for "no-risk" deals Philips, Philips may be left with only one option: folding Real DSP back into its own semiconductor division.
Industry experts agreed that Philips' decision to take back the DSP cores indicate the company's continued interest in the DSP technology. Popp added, "Over the last two years, Philips has shown dramatic differences in their recognition over DSPs." He added that "they recognize, on all management levels, the importance of technologies more than ever before."
Philips is placing TriMedia's media processor and Adelante's DSP as "core pieces of Philips Semiconductors' future," Popp said.
Philips currently offers two different Nexperia platforms, one applied to high-end digital consumer entertainment systems and the other for mobile handsets. Depending on specific applications, Philips said OEMs are expected to choose different CPUs and DSPs on the Nexperia platform.
Popp declined to comment directly when asked whether Philips had experienced a change of heart about spinning off technologies to companies like Adelante. The whole issue, Popp did say, boils down to the "correct and fair" funding model sought by Philips. "It's not the technology that makes the world go around but the financial pieces, or banks, that do that," he said.