MIPS vs. Power:
Truth about comms market share
8/11/2010 6:33 AM EDT
NEW YORK — The networking equipment market is getting red hot again, after a dearth of infrastructure spending by operators over the past two years. As the market heats up, so does the argument over who is actually winning share in the rapidly changing communications segment. In networking market, it’s share and share different.
Lisa Su, Freescale Semiconductor’s senior vice president and general manager, networking and multimedia, recently told EE Times, “We have finally found a driver” for the networking equipment market. “As more people use smart phones and iPads, the networking infrastructure is expected to behave completely differently.”
Herein lies opportunity. Growth is now driven by more wireless data and IP video traffic.
As the network infrastructure transitions to LTE, although it may not reach high volume until 2012, customers have already made “all of the decisions on the architecture,” according to Freescale’s Su.
Calling the communications segment “our home,” Su sees a chance for Freescale to win big in the upcoming infrastructure revamp and recent investment catch-up. Today, Freescale is involved in more than 1,000 design engagements, she said. The good news, she observed, is that “the incredible demand for more technology in networking equipment today is not just driven by Cisco or by a single geography, but by many customers in all regions.”
Freescale, however, isn’t alone benefiting from the renaissance of the communication market. So is MIPS. Sandeep Vij, CEO of MIPS Technologies, recently claimed during the company’s earnings call, that MIPS processors have now overtaken Freescale’s PowerPC in market share in the networking space.
That blanket statement, however, has caused quite a stir (and grievance) among competitors and industry analysts.
Here are some of the talking points used for the debate:
-Was MIPS speaking of its market share in terms of units or value?
-What’s included or not included in their definition of “networking space”?
-Are there any market or technology trends that support the evidence of one processor core architecture winning over others? If so, what are those trends then?
-Or is the processor core debate even pertinent when what goes into a base station, for example, includes not just a processor core but DSPs, FPGAs and ASICs?
The argument ranges even further, though, questioning not just whose is it, but also if it’s kosher for a company to publicly share custom research results.
Of course, we all know that every company is guilty of playing number games by slicing and dicing the data to suit their needs. We’ve all been there, done that.
But it is our responsibility to drill down into data to figure out what it all means.
First, MIPS’ Vij was talking about its growing market share for MIPS in terms of units, not in value. Of course, MIPS’ definition of the communication market includes not just Ethernet switches, enterprise routers and cellular infrastructure, but also WiFi, broadband access points and customer premise equipment where MIPS is traditionally strong.
MIPS also conveniently excludes cellular phones (where ARM dominates) from its numbers, although IDC’s standard market research taxonomy includes them, showing 79 percent of the share in the total of $59 billion wireless communication market projected in 2010.
As Joseph Byrne, a senior analyst at The Linley Group, pointed out, it’s never easy to do an apples-to-apples comparison.
According to Byrne, PowerPC is mainly used in standalone processors whereas MIPS is mainly in ASSPs. “For example, most Wi-Fi access points feature a MIPS core, which is why the MIPS wireless number is so high,” he said.
“On the wired side, most broadband chips include a MIPS core.
PowerPC is used mainly in enterprise and telco communications infrastructure, which is far smaller in terms of volume than consumer gear.”
So, it’s possible to draw a conclusion completely opposite the picture MIPS’ CEO painted, using market share percentage in revenue (not in units) for standalone processors for communications (which is probably more pertinent to the processor architecture debate).
According to Linley Group’s June 2010 “Communications Semiconductor Market Share” report which addresses a 2009 breakout in revenue among standalone processors, Freescale ranked number one with a 45 percent share using PowerPC.
Number two is Intel at 25 percent using x86.
AMCC comes in the third with a seven percent share using PowerPC.
Cavium, based on MIPS, is ranked fourth at six percent.
Netlogic, also using MIPS, is the fifth in the list at a four percent share.
Does this prove that MIPS CEO was untruthful in his statement about MIPS vs. Power cores?
The answer is, probably, no.
There is growing momentum behind MIPS in the enterprise market, primarily fueled by companies such as Cavium Networks (where Vij used to work) and Netlogic Microsystems, both offering MIPS-based ASSPs.
As Shane Rau, research director, computing, networking, and storage semiconductors at IDC noted, the macro trends in the wired section of the communication market are favoring ASSPs and accelerating the adoption of multi-core processors.
But by no means does any of this suggest that Freescale is losing its base.
There’s a lot more to the communications market than processors cores. As Freescale’s Su noted, “I am not competing in a core alone.”
Freescale is leveraging the company’s wealth of technologies: processors based in Power architecture optimized for communications market; StarCore-based multi-core DSPs; and additional investments in software infrastructure.
While the processor cores “are important,” Su emphasized that Freescale’s focus is on system solutions.
By developing special IP capabilities — such as security acceleration and packet processing — in accelerators, for example, “we can offer more performance for each silicon area,” said Su.
Beyond all the arguments and debates about market share numbers in the communications market, what’s clear is that the network processor market is getting even more competitive than ever before.
The days of analysts treating Freescale as a lame duck are long gone.
Jennifer Baxter, research analyst at PiperJaffray, this week wrote in her research note: “We believe that both Intel and Freescale are making renewed pushes into network processors. Freescale has recently refreshed its product line and has jumped from 90nm to 45nm. We believe Freescale’s market share has stabilized and will likely start to grow next year.”
Meanwhile, most industry analysts produced little evidence for technical or market trends supporting a one-processor core architecture over others.
The Linley Group’s Byrne doesn’t believe that there were any technical considerations.
“I think there were a few practical issues why Cavium and Netlogic went with MIPS,” he said. “First, there was an era where MIPS was the preferred architecture at Cisco. Second, although widely used in networking/telecom, PowerPC wasn’t readily licensed when these companies began developing processors.”
Asked about the wireless base station market, for example, Flint Pulskamp, research director of IDC’s wireless semiconductors research, noted that 50 percent of that market is held by X86; 25 percent by Power and 25 percent by MIPS. Are there any changes in the offing? As far as processor cores are concerned, “they are holding their own,” with not enough changes to say one is gaining momentum over others.
Pulskamp explained, bigger market changes in this space include the transition from ASIC to ASSP solutions; single core to multi-cores; a growing number of manufacturers – beyond the usual suspects like Lucent, Nortel, Alcatel and Ericsson – including Huawei, ZTE and others affecting market dynamics; and the trend toward a standard interface.
And then, there is a looming Cisco factor.
Cisco just reported revenue and provided guidance slightly below consensus.
Gary Mobley, senior analyst at Benchmark, today issued a note saying that “accordingly, semiconductor stocks will likely sell off for a third day.”
He wrote: “Based on Cisco’s business trends, there is no evidence that companies such as Cavium Networks or Netlogic Micro will miss the second half of the calendar year 2010 consensus expectations.
However, both chip companies will likely enter a mode of simply hitting consensus versus the beat-and-raise results posted over the past year.”
This may come back to boost Freescale’s market share. As Freescale’s Su noted in the interview, “I am not saying that Cisco isn’t important.
But we serve not just Cisco but a very large number of customers.”