Company Logo Tuesday, January 24, 2006

Sirific unveils 'home run' product

Computer chip for next generation of cellphones is smaller, cheaper - and bigger on performance


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Sirific Wireless says it's on the verge of generating sales of millions of dollars a year after unveiling its first major product, a computer chip for the next generation of cellphones.

The chip is smaller, less expensive and offers better performance than similar technology on the market, the Waterloo company said yesterday.

The chip, a radio frequency transceiver that handles the radio signals cellphones send and receive, is currently being tested by major cellphone manufacturers and semiconductor firms that design cellphone processing systems.

If all goes well, it will go into production in December and be installed in cellphones that start selling in the second half of 2007, Konanur said.

Each model it's in likely will be produced in volumes of tens of millions of units, which explains why the company is forecasting sales of more than $10 million in 2007. "The next few months are critical to driving that revenue in 2007," Konanur said.

Sirific, launched six years ago by Tajinder Manku, an associate professor of electrical engineering at the University of Waterloo, has quietly been working on the chip for two years.

"We were in stealth mode until we got the chip back, and tested it to make sure the performance was at the right levels," Manku said, adding that it took a "lot of smart people" lots of time and effort to get the design right.

To someone who isn't familiar with cellphone technology, the size of the chip is its most remarkable feature. It measures seven millimetres by seven millimetres -- it is one millimetre thick -- making it a fraction of the size of a postage stamp.

The small size is critical because cellphone companies want to add more features, such as location-based Global Positioning System (GPS) applications, without increasing the dimensions of their slim handsets.

"You have to put all this stuff in the phone so you have to shrink everything else that is in there," said Konanur. "That is what our chip does."

It consolidates functions that are spread out over several chips in existing cellphones, Manku said. At the same time, it handles more data at higher rates of speed, and also consumes less power, which means batteries last longer, he said.

"Building a small chip is quite easy," he said. "Getting all of the functionality into it and keeping it that small is what makes it so difficult."

Sirific said the cost is lower because the chip has fewer components and uses an economical semiconductor technology known as CMOS. The company said it is selling the chip for $7.95 US a chip for orders of 10,000.

The chip is designed for phones that operate on next generation wireless networks, called 3G and 3.5G, that have the capacity to move larger amounts of data at higher speeds.

Of the 811 million cellphones that were shipped last year, only 46 million were 3G phones, according to Forward Concepts, an Arizona-based market research firm that focuses on digital signal processing technology.

However, it is the fastest growing cellphone market, said Forward president Will Strauss. Shipments are forecasted to grow at a compounded annual rate of 40 per cent a year, and reach 300 million by 2010, he said.

"It seems that Sirific has an excellent solution for this market," Strauss said. "If they do what they say they can do, they will get some pretty good traction."

Sirific has recorded some sales from its first product, a chip that goes into data cards that plug into laptop computers and personal digital assistants. However, it still describes itself as a pre-revenue start-up.

The company, which employs 25 people in offices on Phillip Street and another dozen in its corporate headquarters in Richardson, Tex., always had its sights on the cellphone market, but developed the data card chip first to gain experience in the design process and built up credibility in the difficult-to-crack cellphone industry.

"It was never our goal to be profitable as a company on that first product," said Konanur. "Going forward, we are focused completely on the handset market. That is where the multi-million number of units are."

Sirific, which uses Taiwan Semiconductor Manufacturing Co. Ltd. to make its chips, has raised $44.2 million US in several rounds of financing.

Tech Capital Partners and Solowave Investments, both of Waterloo, and TD Capital, BDC Venture Capital, Celtic House Venture Partners, Working Ventures Canadian Fund, Agilent Ventures and Intel Capital, have all put money into the company.

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