SAE 2001: Motorola Seeks Circuit-Maker's Expertise

DETROIT -- In a bid to solidify its place in the growing automotive semiconductor market, Motorola has formed a partnership with a German manufacturer of integrated circuits.

But the partnership with Dortmund-based Elmos Semiconductor AG is just that, a partnership, insists Motorola vice president and general manager, Juergen Weyer.

"It is not a merger," says Mr. Weyer. "There is no investment." Adds Elmos vice president and general manager Dr. Peter Thoma: "We are two separate companies."

Details of their agreement remain secret, though Dr. Thoma says the framework provides for a "long-term" association and a statement issued by Motorola says the deal is not exclusive.

"Both parties are free to work with other semiconductor suppliers," it says. The two companies plan to provide automotive customers with advanced microcontrollers, placing an emphasis on competitive pricing and fast time-to-market.

"Elmos and Motorola are committed to providing the industry (with) fast design cycle times and long-term supply capabilities," says Dr. Thoma, who joined Elmos late last year after spending 18 years with BMW.

The luxury carmaker buys about 70% of its microcontrollers from Motorola. And it was there that Dr. Thoma established a working relationship with Mr. Weyer and Motorola.

"I was on the customer side, he was on sthe upplier side," Dr. Thoma recalls.Both men were elusive when asked who initiated partnership discussions. "We had, of course, a motivation," says Mr. Weyer. But, he adds, partnership wasn't a primary goal.

"Did we have to have some partners? Not really. I mean, we have been very successful. But you see there is a lot of discussion about second-sourcing. In many cases, those true second sources are not really there. So the first key thing for us is can you really make a step forward and do some true second-sourcing?"

With regard to Elmos, Mr. Weyer says, the answer is affirmative. The alliance, Dr. Thoma adds, will create "one overall systems knowledge base, operating system, tool set and supply chain."

Elmos, which went public in 1999, brings the capability to provide fast, flexible designs of standard and high-voltage peripherals. Motorola, meanwhile, provides a production capability that affords high volume and high quality. The 73-year-old company is also the world's top producer of embedded processors with global semiconductor sales in 2000 of $7.9 billion.

The first product to feature the footprints of both companies will hit the market before year's end. And already there is no shortage of demand.

"Today, we have probably 20 buyers for it," says Mr. Weyer. Following announcement of the partnership, Motorola revealed its strategy for increasing its presence in the automotive semiconductor market. Motorola is expanding its portfolio of high-performance PowerPC microprocessors to address specific needs of the motoring public, says Scott Anderson, Motorola's senior vice-president.

"Automotive customers are seeking solutions to complex applications, such as adding enhanced safety features, maximizing engine performance, ensuring powertrain reliability and communicating via driver information systems," Mr. Anderson says. "To deliver on these requirements, a high-speed, cost-effective PowerPC microprocessor is needed."