Summary
With the introduction of Prima, SiRF is going toe-to-toe with some of the biggest names in the semiconductor industry. Will they be able to achieve the costs necessary to compete.
Analysis
While the acquisition of Centrality creates the opportunity for SiRF to increase revenue in PND, moving into the SoC business puts them head-to-head with the biggest names in the business: TI, STMicroelectronics, Broadcom, and Samsung, to name a few.
STMicro has already shown their strength by winning another round of Nuvi designs at Garmin with the new Cartesio SoC. Its reasonable to expect that TI and/or Broadcom, both of which have captive GPS chip technology, may produce similar offerings. Although Samsung does not appear to have captive GPS technology at this point, they do command a sizable share of the processor market in PND. Its likely that they will make a move to protect that business against product like the Prima and Cartesio.
There is also cost to consider. TI, STMicro, and Samsung all have their own fabs and control their own costs. Volume also helps improve costs and all of these competitors (including Broadcom) are top suppliers across a number of semiconductor markets. This gives them significant leverage with their manufacturing subcontractors. When comparing SiRF volumes to these competitors, it is reasonable to expect that matching costs will be a challenge for SiRF.
Making things even more interesting, Qualcomm recently entered the market with a SoC that includes cellular connectivity and collaboration with Mitac on a connected PND.
All things considered, it will be interesting to see how the SoC battle progresses over the next few quarters.
