Texas Instruments - DSPS Fest 2000:Fast Forward to Success with TI

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DSPS Proceedings

Tom Engibous
Chairman, President & Chief Executive Officer
Texas Instruments Incorporated
DSPSFest 2000
August 2, 2000 -
Houston, Texas

Fast Forward to Success with TI
It's a privilege for me to be with this group today, because the people in this room are having a tremendous impact on our world.
Innovations in DSP technology have sparked a digital revolution that is penetrating virtually every aspect of our daily life.In fact, DSP and analog semiconductors are the engines driving the Internet Age and a new world of information applications and devices.
That's exciting, but the truth is we're just at the beginning, because the best DSP applications haven't even been invented yet.
The foundation for that innovation is coming from all of us working together - TI and our partners, including our third-parties, educators and customers.
As for TI's view … that's simple. The Internet Age is real, and it marks a fundamental shift in the evolution of information technology.
Electronic computing has been around for more than 50 years now. It began when transistors were the driving force behind mainframes. As technology evolved, TTL/logic drove minicomputers, which gave way to microprocessors and the PC Era.
At every step of the evolution, the relationship between people and machines has narrowed. A single mainframe served thousands of users. Minicomputers served hundreds of people, and the PC established a ratio of one person to one machine.
In the Internet Age, this ratio has flipped. As we move forward, you can expect to see single individuals who use multiple information devices. The proof of this is all around us.
By the end of 1999, roughly 300 million people worldwide used the Internet. Analysts expect that will more than double by 2003.
People subscribing to wireline broadband will jump from less than 4 million last year, to nearly 50 million in the same period. Wireless subscribers should hit the one billion mark sometime in 2002.
And sales of non-PC information appliances - new generations of equipment such as Internet audio players, PDAs and digital still cameras - will grow from 11 million units shipped in 1999 to nearly 100 million units by 2004.
All of this equipment - wireless handsets, broadband modems and emerging end- equipment - will be powered by DSP technology.
That is an incredible opportunity, and we're just scratching the surface today.
Worldwide DSP revenue has quadrupled over the past five years, and unit shipments have jumped seven-fold [Source: Forward Concepts].
Over the next five years, analysts predict that DSP revenues will increase more than 34 percent annually - exploding from almost $4.5 billion last year to more than $19 billion in 2004. [Source: Forward Concepts - April 2000]
You know, anytime I hear about the potential for $15 billion in new revenue - I get excited. And that's just DSP. It doesn't include analog chips … associated software … tools for new DSP applications … nor jobs for people who make all these new things.
For those of you in this room, there will be huge opportunities to enable and accelerate enhanced services such as e-commerce, packet voice, virtual private networks, entertainment, distributed education and training, videoconferencing … and things we haven't dreamed of yet.
Actually, I'll bet that many of you already are dreaming of some of these things. And as your partner, TI is eager to help you move beyond dreams and create new realities.
We're very interested in your plans for the rest of 2000 and beyond. Learning about your plans is a primary reason that we host this event each year.
At this point, I'd like to take a few moments to let you know about our plans for 2000 and beyond.
When we started the year, TI laid out four main priorities - and three of them are directly related to DSPs. Let's look at those three.
First, we're pursuing a strategy we call "full technology entitlement." I believe Mike Hames will go into more detail later during this conference. But in a nutshell, our goal is to accelerate the advancement of process technology so we can strengthen our existing product lines and fast forward the development of new products.
We've increased our capital spending plans to $2.8 billion this year, and we'll spend $1.5 billion on R&D. The vast majority of that is targeted at DSP and analog.
By utilizing our strengths across the enterprise, we're achieving manufacturing cost leadership. In general, we think TI can sell chips for less than many fabless companies can buy them.
We're also using our enterprise-wide strengths to ensure that TI stays at the leading edge for density, high performance, low power consumption, and system level integration.
I'm sure you've heard about the new generations of the C6000, C5000 and C2000 DSP cores that we introduced early this year. The new C64x core is scalable to 1.1GHz, making it ideal for broadband infrastructure solutions.
The new C55x core is the world champ for high performance combined with ultra-low power consumption. It uses just one-sixth the power of its predecessor, which makes it the perfect solution for new generations of handheld information appliances.
And finally, the new C28x core is the first DSP optimized for motor control, delivering up to 400 extended precision MIPS.
Our roadmap calls for DSP systems that can process 3 trillion instructions per second by the year 2010, which means we'll have plenty of power to do anything you innovators dream up.
In addition, we're also working hard to expand our installed software base.
The second DSP priority for 2000 is what we call "broadband breakout" - which means we're moving our DSL, cable modem and voice-over-packet activities to the next level.
To date, TI has shipped 1 million DSL modem ports. We expect an even faster ramp in the second half of the year following recent design wins.
Alcatel recently selected TI DSPs and software for their voice-over-DSL customer modems. Compaq has selected TI's ADSL chipset for their Presario Internet PC. We're already providing DSL solutions for IBM's Aptiva line - and in total, we're engaged with four of the top five PC manufacturers.
For the central office, density is the key. Earlier this year, we introduced an 8-port DSL chipset that delivers twice the density and half the power consumption of anybody else in the industry.
Siemens is using our DSL solutions for Deutsche Telcom's DSL deployments in Germany. In Korea, Samsung and Hyundai are using TI DSPs to serve Korea Telekom. And we're working with IBM and Compaq on SBC's deployments in the US.
These companies are very aggressive in their DSL deployments, and that should generate high volumes for TI.
In the cable modem market, we've gone from a market share of zero just one year ago to become the world's number two silicon vendor for cable modems. We're very close to shipping our one-millionth unit for cable modems, and shipments will accelerate.
In the second quarter, we passed a critical milestone when two of our solutions received the critical CableLabs certification. TI is the only company with CableLabs certification for silicon and software.
It's very clear that broadband communications are going prime time on a global basis. Silicon companies used to be able to get by with broadband "show and tell." But now, the game is about performance and volume, and our motto is "stand and deliver."
Our third DSP-related priority involves the catalog market, and our focus here is on DSP and analog.
Catalog is the way we reach into the mass market and help new products bubble up into the mainstream. In DSP, the C5000 customer base has doubled every 6 months since the end of 1997.
We've shipped hundreds of millions of units based on the C54x architecture, and more than 250 million in the last two years alone. Much of that success is due to Greg Delagi and his DSP catalog team. They've done a fantastic job. But Greg - where are you? -- I know you're not satisfied yet, right?!
In catalog analog, our goal is to have the industry's broadest range of products and to optimize them to work with TI DSPs.
The Burr-Brown acquisition will give us an excellent position in high-performance data converters and amplifiers - making us number 2 and number 3 in these analog segments, respectively. It will take a lot of work, but we've got our sights set to become number one in each.
Already we're number one in analog interface and power management. We're using this analog strength to increase TI's attach rate, which means winning the analog components every time we win the DSP.
In 1998, the attach rate was a paltry 5 percent - and that's probably being generous. We improved to 26 percent last year - and for 2000 we're already running at 40 percent.
To better serve the catalog market, we're using the Internet to let customers order samples, buy products, download information, and try software.
So, that's what we've been doing this year.
Looking ahead, our goal is to keep extending our leadership. We are intensely focused on power, performance, peripherals, cost, ease-of-use and code reuse.
We anticipate that our work with open software platforms will lead to quantum increases in customer efficiency, which should further open the market to third-party programmers.
We'll push hard into new markets, especially emerging end-equipment startups and the catalog market.
We're going all-out to make OMAP - our open multimedia applications platform for 3G wireless services - the de facto industry standard.
And we're going to keep helping educators tie curricula and research activities directly into the industry. We have more than 900 DSP labs at universities around the world and have given out $15 million in grants in the past 5 years. That will continue.
But for TI to be successful, you must be successful. That is what the next two-and-a-half days are really all about.
One of the things you'll hear more about is our new eXpress DSP Compliance program. This program helps customers quickly identify third-party products that are designed specifically to work with TI DSPs - sort of a TI seal of approval.
This program can open doors and expand opportunities for you, so I urge you to find out more about it.
Let me close by saying that TI will do whatever it takes to help our third parties, our academic partners and our customers claim world-leading positions and accelerate the development of new products and technology.
This DSPSFest is an open forum. The dialogue you have here is critical for our combined success.
We want all of you to work with us … to stretch us … and to challenge us. That's the best way to go fast forward into the future together.
There's no doubt in my mind that DSP is becoming the most important category of semiconductor in the industry. Working together, I believe we can create a world where every phone call, every Internet connection, every photograph, every song… indeed, every aspect of the Internet Age -- is touched by a DSP.
It's an incredible opportunity, and we're looking forward to making it happen with you.
I'm also looking forward to listening to Deputy Undersecretary of Defense Delores Etter, who will join us shortly to discuss the government's view of technology.
Thank you for being here…and enjoy the program.

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