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Texas Instruments winds down mobile processor business

by Mark Tyson on 15 November 2012, 14:00

Tags: Texas Instruments (NASDAQ:TXN), ARM, PC

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Texas Instruments (TI) has announced that it is winding down its mobile processor business. The firm will shed 1,700 jobs, which is about five per cent of the company’s global workforce. Rather than just quit the business of mobile and tablet chips immediately following this announcement TI will continue to sell its existing line of processors to customers like Amazon, who use a TI processor in some Kindle devices, for as long as the demand is there. However research and development into these kinds of chips will now cease.

Competition from Qualcomm, NVIDIA, Samsung and Apple is cited as being too hot for TI to handle. Now TI’s plan is to concentrate on processor production for “more profitable markets” like in cars, robotics, health monitors and home appliances. On Wednesday Greg Delagi, TI's senior vice president of embedded processing explained that “Momentum is already building with new embedded applications and a broad set of customers, and we are accelerating our efforts in these areas”. Referring to the proposed job losses Mr Delagi said “These job reductions are something we do with a heavy heart because they impact people we care deeply about”.

The mobile division of OMAP could be sold, according to some Wall Street analysts and reports last month, to Amazon. That would be the favoured course of action as the job cuts and other cost reduction measures planned will bring about costs of approximately $325 million according to Reuters. Whatever happens, the cuts are expected to save $450 million per annum so the plan will not take long to show rewards on TI’s balance sheet.

The current model of Kindle Fire HD is powered by a TI OMAP 4 processor and it is expected the next model will pack an OMAP 5. Luckily it seems like the OMAP 5 is “well along to completion and we do not expect that the termination of OMAP will disrupt those (Amazon Kindle) plans” an analyst said, speaking to Reuters.

HEXUS Forums :: 6 Comments

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"Whatever happens, the cuts are expected to save $450 per annum so the plan will not take long to show rewards on TI’s balance sheet."

So long as your definition of not long is millions of years…
Are they basically admitting OMAP5 is pants then… and they can't be bothered to catch up in a low margin market? Seems odd, the OMAP4 was pretty good when it came out and quite competitive, got plenty of design wins and OMAP5 on paper looks good… and it's not like TI are a small company with no resources.

If OMAP5 is just a bog standard ARM design (it's 2xA15, 2xM4 big.little AFAIK) and they are losing out to the Qualcomm, Samsung and Apple customised designs then its not a good thing for ARM Holdings as it implies you need to customise designs with the ARM architecture to be competitive in the high end? I'd have thought they get a lot more money for the CPU designs than just the instruction set licence.
Samsung Exynos 5 uses standard CPU+GPU cores. OMAP uses PowerVR graphucs instead of ARM Mali.
Samsung Exynos 5 uses standard CPU+GPU cores. OMAP uses PowerVR graphucs instead of ARM Mali.

Then I wonder why if Samsung are all stock design too that TI think they can't compete? Just seems odd really, they seemed to be competing just fine, Qualcomm just had some great results so there must be money in there somewhere. Ah well…
It takes a heck of a lot of R&D and money to design custom cores, there's only really Qualcomm and now Apple using them in the mobile market. Differentiation lies with the SoC itself, there's far more to it than just a CPU+GPU.