Texas Instruments shutters consumer OMAP lines

The only course of action left after sale faltered

ti logo 63x15 Texas Instruments shutters consumer OMAP linesLast week Texas Instruments announced that they were scaling back their OMAP division for smartphones and tablets. Some people were surprised by this turn of events, but it was inevitable when the sale of the division faltered.

To quote Joanne Feeney of Longbow Research, “After many months of hints, TI made clear its intention to exit the smartphone and tablet business for its OMAP application processor.” This confirms then story SemiAccurate broke over a year ago about the attempted sale of the division, and many subsequent turns of events.

When we exclusively broke the news, TI was quite quick to deny it. They said,“We’re aware of recent speculation in the press about the sale of our OMAP business, and want to set the record straight. To be clear, these are rumors, plain and simple. They are not true, and were not started by TI. TI remains committed to our core Wireless business, which encompasses the OMAP applications processors and wireless connectivity solutions. And, we are committed to helping our customers succeed in the marketplace.”

Given the sheer number of sources we had confirming the story, including the name of the then current suitor, we were not convinced of the veracity of their protests. Sources were telling SemiAccurate that the main problem with selling OMAP and exiting the consumer space was simple, defining what OMAP was and what to sell. Do you include the DSPs? The compilers? The imaging cores? The interconnects? Does the buyer own the IP, license it, and what about future developments? Who pays for compiler updates and software fixes. It was a mess.

In the end, the somewhat inevitable happened, and the deals fell through. Both suitors SemiAccurate heard about either backed away or didn’t offer enough, and the unravelling never happened. Faced with the same problem as before, defining OMAP in order to shutter it, TI did the only thing they possibly could, and just stopped moving forward in the markets that they no longer wanted to serve.

The tendrils that interlinked the divisions could not be untangled without other divisions that TI wanted to keep suffering. In a sense, the company has to keep most of the blocks that made up OMAP moving forward even without OMAP itself progressing. The only course of action left was to back out of the consumer business and keep the components going in lines that have a future.

TI was prescient in their views on the evolution of the consumer phone and tablet market. The TAM of any merchant chip/SoC maker has gone from about 66% of the market in phones and ~20% in tablets a year ago to <30% in phones and <25% in tablets today. Add in several new players and a market where performance no longer matters, and you have a dead end for silicon vendors. In that regard, TI was far ahead of the game. Tablets and phones are a dead end for SoC makers not named Qualcomm, kudos to TI for being the first to recognize that eventuality.S|A

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 Texas Instruments shutters consumer OMAP lines

Charlie Demerjian

Roving engine of chaos and snide remarks at SemiAccurate
Charlie Demerjian is the founder of Stone Arch Networking Services and SemiAccurate.com. SemiAccurate.com is a technology news site; addressing hardware design, software selection, customization, securing and maintenance, with over one million views per month. He is a technologist and analyst specializing in semiconductors, system and network architecture. As head writer of SemiAccurate.com, he regularly advises writers, analysts, and industry executives on technical matters and long lead industry trends. Charlie is also a council member with Gerson Lehman Group.