Wednesday, August 16, 2006
Interview with Bill McLean, CEO of GloNav
The semiconductor business doesn't get the headlines the Internet business does, and seems to have somewhat fallen out of favor with many venture capitalists. However, there are a growing number of startups who are bucking the trend, and taking on the semiconductor business. Newport Beach-based GloNav (www.glonav.com) is one of those companies. GloNav is developing GPS chip technology, and is a recent spin out of CEVA, a major manufacturer of DSP, multimedia and other semiconductor IP cores. The company also acquired RFdomus, a startup here that was also in the same space. I spoke with Bill McLean, CEO of the firm, about where the firm fits and what its plans are for the future.
Ben Kuo: How did GloNav come about, and how does GloNav fit into the semiconductor business?
Bill McLean: GloNav came together based on spinning out a division of a public company, CEVA, which had GPS baseband intellectual property they were licensing. We purchased a RF company in Southern California, RFdomus, to form GloNav. RFdomus had a fully working GPS radio, and the technology out of CEVA has been licensed to eighteen companies, major semiconductor manufacturers and handset products firms. The technology is solid, has been proven, deployed, and brought into production with licensees. The core team that came with the spinout of CEVA had been together developing and refining this technology for over twenty years. They have ten generations of products under their belt in the marketplace--there's no GPS team with this kind of lineage and heritage in this space. Our experience predates Qualcomm, SIRF, and predates everyone. We have a strong position in the marketplace to very quickly take the technology we have already licensed, and to bring it into production under our own brand. We are taking the radio which RFdomus had, and under the GloNav brand selling it immediately to people who have already licensed our intellectual property.
Ben Kuo: How are your GPS chips different from others in the market, especially as you see companies integrating this into their processors?
Bill McLean: We think there will be a large market for standalone GPS products for the foreseeable future. If you look at the Bluetooth example, and see how the technology was adopted by handset manufacturers, and ultimately integrated into baseband processors, we believe GPS will follow the same path. We are where Bluetooth was at inception--where you heard that Bluetooth would be integrated very quickly, which was just not the case.--to this day, Bluetooth is just starting to be integrated. Cambridge Silicon Radio has a successful large business selling standalone Bluetooth transceivers. We believe the GPS market will evolve the same way, and that there is a tremendous opportunity to sell standalone products. That said, we believe that it will be integrated, eventually.
We are the only company that can saw that we have licensed, deployed, and brought to production, GPS in baseband and applications processors on numerous occasions. We have tremendous credibility to stand out against other competitors, in regards to our product and how it compares. We are focused on handsets and personal navigation devices. The reason we are focused there is, our technology has attributes that fit very well to our target markets, such as low power. We have the lowest power solution in the industry, which is a very important care-about in handset and in personal navigation devices. We will come out the best in class, time to first fix. For an end user, that means that a consumer doesn't have to wait an inordinate amount of time to acquire signals and lock on a satellite to obtain a position. We also have extremely high sensitivity, relative to the competition, so that we not only can acquire but track deep indoors. In location based services, which we think will drive GPS, that is critical.
Ben Kuo: Can you tell me a bit about the technology and processes you are using for your semiconductors?
Bill McLean: We're manufacturing our baseband processor on 90 nanometers, low power CMOS process with TSMC. TSMC is the largest independent foundry in the world.
Ben Kuo: What was your thought process on the spinout of the company?
Bill McLean: We were funded by a venture firm called Atlantic Bridge Ventures. Atlantic Bridge is a fairly large fund, a fund of funds, backed by major venture funds. Most importantly, it was founded by Brian Long , who was also a founder of Parthus--which became CEVA. Brian Long was instrumental in acquiring the GPS technology at Parthus, then CEVA, bringing it into the company and licensing it. He was also very interested in spinning that technology into the fabless model. We saw that there is a large, standpoint GPS market going forward, and that the licensing model that was in place only made sense if the technology was integrated into baseband processors very quickly. CEVA could not take it to market under the company--you can't license technology to clients on one hand, and compete with them on the other. That will either confuse the customer, or destroy the licensing business or the chip business. It's very difficult to have both under one roof. CEVA was in full agreement to the spin out. The investment has been significant, and including investments under Parthus and CEVA we've invested $75M in the technology to date. That's $60M we've spent, with $16M as a result of the spinout. It's not like a traditional startup, where you're starting from a dead start--we've been at this for twenty years, and the technology is proven. We are going to hit the market very hard and very fast.
Ben Kuo: Are you shipping products now?
Bill McLean: The radio is ready to ship. We are going out to the customers that have previously licensed technology for us, as they already have an interface that supports the radio. They have drivers already developed, and we know who those licensees are using for processors. We can come in immediately and offer a reduction in power, up to 80 percent in some cases for the radio. We can be very competitively priced as well. We'll be back before the end of year to announce other products, and you can expect us to follow a path much like our competition.
Ben Kuo: The semiconductor market has a reputation of being very tough on startups. Why did you decide that a spinout was the right thing now?
Bill McLean: In the semiconductor industry, there will always be areas like GPS where major semiconductor manufacturers haven't developed technology. For them to start developing the technology would be extremely costly. There's an opportunity for us, where we probably look very attractive to major semiconductor manufacturers as a must-have piece of solution. Let's face it--this will be integrated into baseband processors or application processors in handsets, eventually, but most of the major semiconductor companies do not have technology in-house. There are very few, viable companies to acquire to bring it in-house, which is good for us. This space also has lots of patents surrounding the technology--it's a patent minefield, which we have been able to step through. It would be a major problem for a major semiconductor company to start today and not run afoul of those patents. There are probably over 150 critical patents in the marketplace you have to be careful of, and we have been able to do it. For a lot of reasons, we've been able to come out and start the company, and build it up very quickly. These are large markets, with very short time to revenue, so we are able to ramp our revenues relatively quickly by engaging with just a few customers in the space.
Ben Kuo: Thanks for the interview!