EU approves high-tech chip JV

BRUSSELS: Infineon Technologies AG, Motorola and Agere Systems won the European Commission clearance to form a company that will make chips at the heart of consumer electronics, from video-cams to cell phones.

Germany's Infineon and its two U.S. rivals will each own one-third of a company to be known as StarCore, which will make high-speed number-crunching chips known as Digital Signal Processors (DSPs). The market is potentially huge, because improved DSPs make possible ever more sophisticated sound, graphics and video. The overall market for DSPs is estimated by analysts at $12 billion and has traditionally outpaced the overall chip market.

Although there is already a wide range of designers and chipmakers that license the core architecture of DSPs, they have hitherto been focused on narrow segments of the market.

These companies include Ireland's Parthus, STMicroelectronics/Hitachi and Belgium-based Adelante. StarCore will be based in Austin, Texas, the same state as its biggest potential rival, Dallas-based Texas Instruments. It will initially employ only about 100 people and aim to produce DSP "cores", which its backers hope will set the industry standard.

In the software and hardware industries, success usually goes to the company best able to combine production capacity with an acceptance of its products as the best platform for software writers. The supporters of StarCore say that they hope to get the edge over Texas Instruments by freely licensing their technology to any company that wants it.

© Reuters