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<p>Atmel has defined a two-chip solution, marrying either the ATmega1281 or ATmega2561 AVR controller with an RF device, the AT86RF230, available in two frequency bands for PAN applications. The current, 2.4-GHz RF230 will be followed by the RF210, for 868- to 928-MHz bands.</p>

For the fourth consecutive year, salary increases are below 4 percent as employers keep the lid on budgets.

So what could Freescale and IBM be cooking up? People have said to me; Oh it will be a PowerPC thing,” Well it could be. Both companies have driven the architecture at various times and it is at risk of losing traction right now. But my gut feel is this is a bigger and more forward-looking announcement than something around a 20 year old RISC architecture.

We've been invited to listen to John Kelly, senior vice president of technology and intellectual property for IBM Corp. and Michel Mayer, chairman and chief executive officer of Freescale Semiconductor Inc. and they have more than one announcement to make, apparently. In other words, we are going to the top and what is being indicated is corporate, strategic stuff. And where did Mayer come from prior to joining Freescale?

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You guessed it; IBM.

After recent discussion of an imminent consolidation in the industry are we about to hear about a merger of IBM's chip operations with Freescale?

It seems unlikely, not least because we are heaing tell that press conference will usher in a new era of collaboration” and the co” in collaboration implies two or more parties. Although, in theory, a merged IBM-Freescale could be collaborating with other parties. Indeed, given the history of the two organizations, they would be.

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Freescale and IBM are natural allies and have been so since the Somerset joint design venture in Austin, Texas, 15 years ago, which sought to drive the PowerPC forward for Apple and into other applications. Somerset was disbanded in 1998 as I remember and nearly a decade later Apple has said they are transitioning to using Intel processors inside Mac computers. That means that, as a computer processor architecture, the PowerPC is in its twilight, although it does figure prominently as the embedded processor in games consoles.

But, with or without a merger, extending collaboration would also raise issues for IBM and Freescale. IBM is in a multifaceted manufacturing process club with Chartered, Samsung, AMD, Infineon, and Samsung, while Freescale participates at Crolles2 in France with STMicroelectronics and Philips Semiconductors and by extension with foundry chip maker Taiwan Semiconductor Manufacturing Co. Ltd.

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The control of intellectual property is a key part of these collaborations and it is not a simple matter to extend them. The more technology involved and the more participants there are, the more difficult it becomes to admit a company or group of companies at a later date.

For the reasons above I am shying away from tipping a full blown merger at this time but think that one of the most successful things that IBM and Freescale have in common could be at the heart of the forthcoming press conference: silicon-on-insulator technology.

ST's Lagomichos believes ST has an advantage because of the company's dual process strategy. Since the process technology used at the Crolles 2 Alliance— a joint operation among ST, Philips Semiconductors and Freescale— and that of TSMC are interchangeable, we can take advantage of the competition between the two,” said Lagomichos.

Shift to HD

The introduction of HD content— in cable, satellite, terrestrial and IPTV— has reversed the commoditization trend” of set-tops, said Lagomichos. For delivering HD programming without sacrificing channels, service providers need H.264. Asked about the most important set-top market trend today, The story is H.264,” said Michelle Abraham, principal analyst, converging markets & technologies, multimedia at In-Stat.

That shift to HD means higher margins for semiconductor companies. For HD-capable satellite, cable and IP set-tops, MPEG-2 decoder chip— at less than $10 now— is being replaced by an H.264/VC-1/MPEG-2-capable chip that will cost twice as much, said Lagomichos.

Once the industry begins adopting H.264, there is apparently no going back. Lagomichos said, If you are not there today (with multi-standard chip), you are out tomorrow.”

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A repeat of the early-2000 period, meanwhile, would create other unpleasant scenarios. Double- and triple-ordering, for instance, presents many challenges that smaller distributors would have a harder time overcoming. If I'm going to double the size of my output, hire people [and] invest in more equipment, I have to know that it's not a short-term trend,” Beeson said.

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