For Texas Instruments, Small Is Huge

TI said its 45-nanometer manufacturing process will also affect the higher end of its product portfolio, resulting in cell-phone chips that have more muscle for applications such as video and gaming.

Shares of TI closed down 2.43%, or 72 cents, at $28.96 Monday.

Freescale Semicoductor(FSL), which also makes chips for cell phones, said it is still premature to discuss its technology and process at the 45-nanometer generation. But a spokesperson stressed that the company is on track to qualify its 65-nanometer technology this year and that Freescale has a business model of transitioning to a new generation every two years.

Among the technologies that Freescale is considering for its 45-nanometer manufacturing plan is strained silicon-on-insulator substrates. The company announced Monday that transistors based on this technology can achieve 30% greater performance while reducing active power consumption by 40%.

For its part, TI said its 45-nanometer chips will reduce power consumption by 40% and give a cell phone up to 30% more standby time.

Semico analyst Dave Cavanaugh says TI's 45-nanometer technology appears to provide an impressive balance in the finished chip's trade-off between power consumption and performance.

According to Cavanaugh, TI can reduce power consumption not only by switching off unused portions of an integrated circuit but by manipulating voltage and frequency to throttle down power consumptions within certain parts of a chip.

"There are just a handful of companies that are announcing production at 45 nanometers with this kind of power-performance trade-off," says Cavanaugh.

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