Without Chips, Mobile Is Nothing

mobileTech Tuesday, by Steve Guengerich

As I was on my way to pick up my Monday morning coffee at 6am, I had an audio double-take when I heard this exchange on the morning news report between the KUT anchor and a reporter from the Austin Business Journal about chipmaker Altera Corp’s announced intentions to move some R&D operations to Austin.

KUT anchor: “Why did they choose Austin for this?”

ABJ reporter: “Oh, because there is a Tech sector sort of emerging here in Austin – a lot of its due to smart phones and other cell phone technology…”

It was that “Tech sector sort of emerging here” comment that triggered my double-take.

I know most AustinStartup.com readers are pretty informed tech followers, so this may not be news to many of you, but I think it would fair to say that the tech sector in Austin is beyond the “emerging” stage.

In fact, semiconductor companies like Altera, far from being latecomers to our scene, were actually among some of the first big employers to plant their flags in central Texas. We didn’t get one of our many nicknames – Silicon Hills – by accident.

Back in the 1980s, Austin won a couple of national bake-offs to bring the Microelectronics and Computer Technology Corporation (aka, MCC) and Sematech to anchor the region’s federal and industry R&D funding in semiconductors.

Through the years, we’ve accumulated a number of big names: Motorola, IBM, AMD, Freescale, Spansion, and Samsung. Not surprisingly, we’ve also attracted major presences from the world’s largest suppliers of semiconductor manufacturing equipment, with Applied Materials and Tokyo Electron. This doesn’t count the presence from Intel, ARM, and others, with substantial teams of chip designers in Austin.

But while much of my writing for AustinStartup has to do with apps and the services side of our mobile scene, what’s really exciting is the next wave start-up activity we see from the eco-system of semiconductors for mobile.

Because, for sure, it’s coming. An indisputable sign, announced just last week, was news of Apple‘s becoming the world’s largest buyer of chips for computers and phones, driven by the success of the iPhone and iPad, according to research firm IHS iSuppli.

And, no surprise for those in the know, Austin has an iron “in that fire” with the presence of Cirrus Logic, a firm that’s riding the mobile wave so well that its stock is on the “Buy” list for many, due to the increased confidence that the company’s products are designed into Apple’s upcoming CDMA iPhone, iPad 2, iPhone 5, and iPod Touch.

From a start-up perspective, you could probably point to the modern-day roots of the mobile phone revolution inspiring semiconductor innovation in the Austin area with the launch of Silicon Labs.

A big bet by Austin Ventures and others, that has paid off handsomely, it kick-started a wave of mobile-influenced chip innovation that continues to this day, with AV portfolio companies includingBlack Sand Technologies, Innovative Silicon, Nascentric, and VeriSilicon.

But, as amazing and dependable as Moore’s Law has been, we’re on the verge of a whole new wave of chip development that could benefit our region.

From the nearer-term packaging innovation of companies like Calxeda (chronicled just today by GigaOM’s Stacey Higginbotham) to the longer-term quasi-science-fiction-like R&D research like an IBM team’s recent announcement that they were able to produce films (think integrated circuits) of graphene material just a single atom thick, I think it’s safe to say that Austin’s tech sector is moving the “emerging” stage and is on its way to a “how big can we get it?” stage.

As always, questions, comments, and opinions (both opposed or in favor) are welcome! 

What do *you* think Austin should be doing to encourage and accelerate innovation in the semiconductor ecosystem, especially as it relates to products and services directly supporting growth in mobile tech?

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  1. Great post Steve. Fully in agreement that Austin is well beyond “emerging.”