|Edge: Third-generation mobile phones are starting to become prevalent in earnest. What is your view of the present situation?
Nagata: At present, mobile phone handsets (hereafter called “mobile phones”) are increasingly introducing advanced functions and multimedia capabilities. At the same time, mobile phone systems are making a transition from second-generation (2G and 2.5G) mobile phones to third-generation (3G) models. In particular, our 3G FOMA series is a high-end mobile phone line-up with improved capabilities. With the introduction of flat rates and the increasing use of large-volume content such as video, subscribers are discovering that convenience and entertainment features are improving rapidly.
Previously, the focus of multimedia features was on still images, video, camera capabilities, memory devices and displays. But in the future, it will be increasingly necessary to give users more enjoyment and greater convenience via capabilities such as electronic commerce (EC), security, position information and features common to digital information consumer electronics. Powerful semiconductor devices and solution software are essential for supporting such multimedia functions. To facilitate the widespread use of FOMA services, it is imperative that such advanced functionality be achieved in an appropriate mobile phone size, and that costs of enhanced phones be kept as low as possible.
Kawasaki: As a semiconductor maker, we, too, anticipate the further evolution of mobile phones and the expansion of lifestyle-oriented services. We believe system-on-chip (SoC) technology, which incorporates various electronic functions into a single chip, is a good way to add more functions to mobile phones while also providing cost reductions. The SoC concept gave rise to the SH-Mobile series of application processors, devices that incorporate SuperH™ CPU cores. These processors can implement multiple functions and they’re the key to low-cost SoCs. We see them making a major contribution to the spread of 3G mobile phones.
Edge: What breakthroughs do you think are needed for current mobile phones?
Nagata: Looking forward, the next-generation mobile phone market will not be revitalized unless all manufacturers can develop mobile phones with advanced functions and good cost-performance. Every breakthrough needed to accomplish this is important. One reason we are closely watching Renesas’ semiconductor development and manufacturing technology is because Renesas produces many different types of semiconductors used in mobile phones, from SoCs such as the SH-Mobile processors mentioned by Mr. Kawasaki, to LCD drivers, RF components and more.
Renesas is an established supplier of components to many mobile phone manufacturers. That’s important because we encourage competition to decrease the unit price of high-function models, and we seek ways to make it possible for various manufacturers to produce sophisticated phones inexpensively. Breakthroughs are needed to decrease development and manufacturing costs, despite the obvious technological hurdles. Semiconductors with higher levels of integration are crucial to viable solutions.
Kawasaki: Up to now, Renesas has worked with mobile phone manufacturers in the traditional way: as a semiconductor supplier. With the advanced functions being invented as a result of the shift to 3G communication technology, semiconductors must become more directly connected and responsive to the needs of service suppliers and the infrastructure. Cooperation and partnership activities are needed in a wide range of fields besides just the development of semiconductors.
Edge: The i-mode service NTT DoMoCo introduced caused a revolution in mobile phones. Will 3G give rise to more of this type of innovative technologies and services?
Nagata: When i-mode first appeared, customers were probably only a little surprised. I suspect that a typical reaction was, “That new supplementary service makes my use of a mobile phone a little more convenient. Now I can see interesting information with just a click.” In our experience, the way to achieve explosive diffusion in the mobile phone business is to offer customers a bit more convenience and make them feel slightly surprised, rather than shocking them with services that are “over the top.”
Generating these “mini surprises,” though, often requires substantial technological innovation, and this will hold true even after the shift to 3G. For example, mobile phones with multimedia functions aren’t merely an assemblage of personal computer functions. They’re the result of many breakthroughs in technology. We are convinced that we can apply Renesas’ semiconductor technology to make such breakthroughs in the future. One of our hopes is that synergistic effects will be generated by the valuable ongoing relationships Renesas maintains with leading firms in digital consumer electronics, automobiles, industrial equipment and other fields, not to mention with the leading mobile phone manufacturers.
Edge: What is your evaluation of SH-Mobile technology?
Nagata: I am very aware of and impressed by the remarkable multimedia technologies incorporated in SH-Mobile application processors. Unfortunately, though, most users are not, since they almost never get to directly know the capabilities of these devices. Instead, they evaluate a phone based on what they watch and hear. For instance, they might feel that whereas game character movements were slow in their previous mobile phone, the action is much better in the latest model. They also might be impressed with the fact that they can play 2D games in a 3D environment. Game players can experience one of the mini surprises I mentioned earlier. And SH-Mobile processors are typical of the innovative devices needed to enable such surprises.
As a communications carrier, we distinguish ourselves from other companies in the market by offering services that deliver mini surprises that are welcomed and valued. Obviously, we want to be able to provide many such services as soon as possible. Fortuitously, the roadmap for services we envision is consistent with — and aided by — the semiconductor technology roadmap Renesas has established for the SH-Mobile family.
Kawasaki: Our expertise in semiconductors encompasses a long and successful track record of advances and accomplishments in fabrication, design and other technologies. We understand the continual technical challenges of reducing power consumption, boosting performance, cutting cost, and implementing innovations. However, it’s very important that we properly grasp the needs of mobile phone users when we formulate new solutions. If we don’t, we might propose unsuitable approaches that phone makers won’t adopt. By sharing our development roadmap with NTT DoCoMo, we stay aligned with future trends. That is a big advantage for Renesas.
Edge: It is said that 3G provides the best opportunity to make a foray into international markets.
Nagata: We are convinced that we cannot prevail against tough competition unless we think in terms of the global market at all times. In July of this year, FOMA subscribers topped the five million mark. Spurred by this growth, we are considering spreading FOMA services all over the world. This would allow users to enjoy convenient services wherever they travel, just as they do now in Japan. In order to successfully carry out such global operations, we deem it essential to forge alliances with companies that have promotional capabilities and competitiveness overseas in various fields in both software and hardware, and to undertake the development of services and mobile phones while sharing roadmaps. Competition in wireless services will undoubtedly further intensify, so it is vital that we build relations with expert firms that will exchange knowledge and help foster outstanding services and efficient cost structures.
From this perspective, our relationship with Renesas is exemplary. Renesas has established successful worldwide operations in various areas of semiconductors. Many mobile phone manufacturers use SH-Mobile application processors, and we believe the channels and know-how they have cultivated overseas through this experience are major assets. As we expand our FOMA operations globally, it will be important to also incorporate W-CDMA (Wideband Code Division Multiple Access) and GSM (Global System for Mobile Communications) technologies. Renesas has the power and resources to sell not only semiconductors throughout the world, but also SH-Mobile multimedia processing technology and GSM technology. Those capabilities are potent strengths that bolster our overseas business strategy.
Kawasaki: Renesas ranks third in the world in terms of semiconductor sales, and we have earned the #1 ranking in the world in sales of microcomputers and SoCs. We appreciate the respect that NTT DoCoMo has given our company, as well as the worldwide business opportunity they’ve opened for us. We hope to justify their confidence by using our strengths to contribute substantially to the success of their strategy.
Edge: What is the aim of this joint development program?
Nagata: The joint development program is motivated by the view that we “cannot win without globalization.” To make FOMA the de facto global standard, we must be able to provide our mobile phones and services anywhere in the world in the same manner we do in Japan. However, since most mobile phones used for FOMA services have advanced multimedia functions, they typically have relatively high manufacturing and development costs, which may hinder operations in the global market. Therefore, we want to shift as soon as possible to a business structure in which high-function, low-cost FOMA handsets are the mainstream products. This will require the help of Renesas, and we plan to jointly conduct the mobile phone business in overseas markets as partners in a “win-win” relationship.
Kawasaki: By undertaking joint development with NTT DoCoMo, a mobile phone carrier, in business operations covering world markets, Renesas can get closer to the needs of customers who use mobile phones. Also, this activity pushes us up to a higher stage of business. There is no question that NTT DoCoMo is the best partner with which to hone our skills to cope with services.
Nagata: It’s not possible to combine existing semiconductor devices and achieve outstanding cost performance in high-function mobile phones that offer functions such as FOMA services. The critical question is whether or not a chip can be manufactured with built-in functions that enable the services we wish to offer to subscribers. If not, another IC must be added to the design, raising the cost of the phone. Because both of our companies are sharing their roadmaps, we can know future plans for semiconductors at an early stage, then use that knowledge as we plan new services for customers. Clearly, semiconductors for mobile phones are starting to have a major impact on the business of carriers.
Kawasaki: What you just said highlights an important area of responsibility Renesas has in this relationship. To successfully plan the SH-Mobile application processor family, it’s critical that we understand the services that might be provided to mobile phone users at various points in time. We want to initiate the development of new devices that will, when they’re introduced, deliver the capabilities needed to implement those services to the greatest extent possible, given technology and cost constraints. Shared knowledge allows us to confirm that we will have the solutions needed, when they are needed.
Edge: Specifically, what kind of semiconductor will be developed through the joint development program?
Nagata: Our goal is to get a dual-mode LSI chip that incorporates W-CDMA and GSM technologies and can handle multimedia functions. This semiconductor solution will reduce costs and make it easier for us to launch competitive, globally capable mobile phones into world markets. The new chip Renesas will deliver will have a profound effect. Its advanced semiconductor technology will lower the price of phones. In turn, that will fuel market expansion, and then the larger market will lead to further cost decreases through increased competition.
Kawasaki: As you know, our solid SoC technology base makes the W-CDMA and GSM capabilities of new device achievable. And the multimedia functions we will incorporate into the SH-Mobile device are a good fit for NTT DoCoMo’s roadmap.
Nagata: NTT DoCoMo envisions that FOMA handsets will be developed by many mobile phone manufacturers ? the more, the better. The key enabling device, perhaps common to all designs, will be the new SH-Mobile chip. When it’s supplied in large volumes, it will be a very cost-effective component.
Edge: Single-chip implementation can be expected to spread 3G technology itself across the entire globe.
Nagata: NTT DoCoMo engineers developed 3G baseband technology over a span of many years, and it is our earnest desire to spread this technology throughout the world. The combination of reduced phone costs through single-chip solutions and an increase in FOMA’s connectivity in the world offers enormous benefits. The joint development program with Renesas is enabling us to find a realistic solution for simpler phone designs. This relationship encourages us to seek similar relationships with other device development companies that will share their roadmaps. And, of course, steady progress on the first single-chip solution will encourage us to discuss other projects with Renesas.
Kawasaki: The technology NTT DoCoMo is providing us in this joint development will spur the consolidation of device solutions for mobile phones. In the future, we plan to attain global superiority by strengthening hardware, middleware and tools relating to single-chip implementations.
Edge: What service comes after 3G?
Nagata: Wireless technology is characterized by rapid change. At first, in 3G we are planning a data transmission service with a maximum speed of 14Mbps, achieved via high-speed downlink packet access (HSDPA) technology. Further into the future, we are establishing 100Mbps transmission technology in a mobile transmission environment similar to that of an automobile.
Technologies capable of transmitting large volumes of data at high speeds allow more types of services to be offered and lead to improvements in content. Higher data rates also tend to boost the trend of adding more multimedia applications to mobile phones.
Kawasaki: Renesas has a roadmap for semiconductor fabrication in 90nm, 65nm, and other processes. We have to be fundamentally fit in our design and process technologies order to contribute to the evolution of mobile phones. At the same time, we hope that by sharing our roadmap with NTT DoCoMo we can make development plans for semiconductor products that are more concrete. This will facilitate the development and provision of high-quality products. We intend to move forward with firm goals on both the service and application fronts, while incorporating leading-edge semiconductor technologies.
Nagata: I believe that as NTT DoMoCo and Renesas constantly discuss the pace at which integration is improving and what can be achieved. As we undertake development that is fined tuned by sharing our roadmaps, we can attain substantial growth in the mobile transmission business.
Edge: Thank you very much.