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Nvidia lets go of LTE modem business

Posted: 08 May 2015     Print Version  Bookmark and Share

Keywords:Tirias Research  Nvidia  LTE modem  Icera  Wi-Fi 

Nvidia has announced that it is closing the doors of its LTE modem business that it acquired from Icera in 2011. The move by Nvidia has been anticipated as the company has more recently focused on gaming, automotive, enterprise graphics and the cloud applications, areas where Nvidia has had recent success leveraging its GPU expertise. However, these applications do not require modem technology. Particularly, the Tegra product has been refocused on gaming platforms and automotive applications.

Icera was one of the many LTE start-ups that were swallowed up in the cellular modem and Wi-Fi grab that occurred several years ago. Icera's technology was particularly interesting because it was a software defined modem that, theoretically, could not only support LTE, but older cellular technologies and Wi-Fi as well. Nvidia purchased Icera in the hopes of integrating the technology into the company's Tegra product line to compete in mobile devices, particularly smartphones. Having integrated modems was seen as a critical component as the industry leader Qualcomm rushed to integrate cellular modems. However, the market has shifted dramatically in the past few years.

When Icera was purchased, well over a dozen semiconductor companies were vying for a piece of the growing smartphone market, which shipped over 1.2 billion units in 2014. Since then, companies such as Broadcom, TI, Freescale, Renesas Mobile and ST-Ericsson have all exited the mobile market. In addition, many of the leading smartphone vendors such as Apple, Samsung and Huawei, have begun using their own applications processors, which account for over a third of the total market. As a result, there are only two remaining major smartphone chipset providers, Qualcomm and MediaTek, and a handful of Chinese start-ups competing for the rest of the market.

At the same time, competing in the market for discrete or integrated modems has become more challenging. Wireless carriers in developed markets have rapidly shifted to new LTE revisions and adopted new features, such as carrier aggregation, to improve performance and network efficiency, as well as providing differentiation to competitors.

In addition to these dynamics, the market for applications processors and cellular modems has also grown outside of smartphones. Segments ranging from home entertainment to automotive and other embedded applications have adopted applications processors as they have sought to leverage the mobile ecosystem. While having an integrated modem is still a critical differentiator in some applications, not having one will not preclude Nvidia from succeeding in other applications, especially if they have high graphics or GPU computing requirements. Nvidia's recent successes in automotive is a good example.

Unfortunately, consolidation in the semiconductor market is a result of the maturity in the applications. Although this appears to be yet another reduction in competition in smartphones, competition amongst semiconductor vendors amongst the plethora of IoT applications continues to grow as those markets develop.

- Jim McGregor
  EE Times





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