The semiconductor industry is squeezing more and more onto chip

SAN JOSE, Calif.

Three years ago, as many as 50 chips would have been needed to handle the features built into Ericsson's new T66 cell phone. Today, four slivers of silicon do the job.

As a result, the phone is among Ericsson's smallest and most powerful, one of a generation of devices integrating functions that used to require multiple gadgets.

And the phone is on the market now -- not stuck on the drawing board.

"It's a classic example of the system-on-a-chip approach," said Lewis Chew, chief financial officer of National Semiconductor Corp., the Santa Clara-based company that supplied the chips. "We took all the radio, digital processing, power management and the audio, and put it on the four chips."

The semiconductor industry has always managed to squeeze ever-more features onto smaller pieces of silicon, but this integration is leading to remarkable results.

Complete systems can now built on a piece as small as a match head, allowing cell phones to act like palm-size computers, and small handhelds to work as phones.

These systems-on-a-chip, which usually aren't advertised to consumers, are also behind smaller set-top TV boxes that can handle both video and Web-surfing, powerful video game players and the latest, Internet-capable video recorders.

If an electronic device is faster, smaller and cheaper, it's likely more integrated than previous generations.

No signs of slowing

Though the semiconductor industry suffered its worst downturn ever in 2001, this integration shows no signs of slowing.

Intel Corp., for instance, is working on adding radio to every chip it makes. This innovation could usher in a new era of computing where all devices -- from handhelds to PCs -- are seamlessly and always connected.

Wireless is but one of the features being integrated on individual chips. Advanced power management, video encoding and audio processing are also being added like so many Lego blocks.

It's not just consumer electronics.

IBM Corp.'s new Cu-08 technology, whose first customer is expected to be networking giant Cisco Systems Inc., allows voltage to be altered within individual chip components. This can reduce power by supplying only the functions that are in use at any given moment.

These advances are not limited to servers, routers, PCs and cell phones. They're changing everything silicon touches, from car parts to dishwashers to electronic door knobs in hotels.

"Most of the public doesn't realize it, but there have been far more non-PC computer chips sold for the last several years than PC chips," said Richard Doherty, director of research at the Envisioneering Group.

Simple physics

This improved performance is a simple matter of physics. In older systems, the chip handling the computations sends data electrons to memory chips or to other chips interacting with the outside.

Integrating the functions shortens the electrons' travel distance. That means faster performance on less power -- whether it's an MP3 player or Internet router.

Fewer chips also cut costs and allow companies to bring products to market more quickly.

Pat Gelsinger, Intel's chief technology officer, says his company still faces technical hurdles in squeezing radios onto its chips -- something it aims to do within 10 years.

For one, it remains to be seen how the hardware might be upgraded without opening holes for hackers.

"Every step of the way, we can put more in," Gelsinger said. "But we could also be putting the wrong thing in."