Freescale: The End of a Long Journey – Part II

There is a famous story about Bill Gates’ mother, Mary Maxwell Gates, asking guests on a dinner table about the single biggest factor that contributed to their success. The answer of Bill Gates and Warren Buffet was the same: Focus.

That one word “focus” also sums up the stigma of Motorola’s crown jewel that never was: Motorola Semiconductor Products Sector or Motorola SPS. In hindsight, Daniel E. Noble, the father of Motorola SPS, was a visionary and his conviction regarding the potential of solid-state electronics was spot-on.

Motorola SPS was a semiconductor industry icon of its time

However, Motorola management was ambivalent from the start on whether the company would succeed as a component supplier while continuing to grow its equipment manufacturing business. Nevertheless, Motorola SPS had become a semiconductor powerhouse by the 1970s.

Motorola SPS launched its first microprocessor—the 8-bit MC6800—in 1974, a couple of years after the introduction of Intel’s pioneering 8-bit microprocessor 8008. Motorola’s MC6800 microprocessor was used in automotive, computing and video gaming applications.

Soon, Intel’s 8008 and Motorola’s 6800 formed a processor duopoly, and they were mostly targeting industrial and business machine terminals. And then came the watershed moment: the birth of the personal computer.

End of Processor Duopoly

It’s widely believed that IBM had originally planned the design of the personal computer around Motorola’s 8-bit 6800 microprocessor. However, IBM engineers as well as software partners like Microsoft favored the use of the 16-bit processor; Motorola’s 16-bit 68000 processor was a year away from IBM’s deadline.

At this turning point, Intel’s PR machine portrayed the Santa Clara chipmaker as a processor-centric company with a strong systems approach. On the other hand, the campaign emphasized the fact that microprocessors only made a small part of Motorola’s business. Eventually, IBM’s microprocessor business for PCs went to Intel, and the rest is history.

There was a time when Intel and Motorola were neck-and-neck in microprocessor business

Motorola SPS responded by snapping up the design win with Apple’s Macintosh family of personal computers. Next up, Motorola began supplying processor chips to workstation manufacturers such as HP and Sun Microsystems.

However, Motorola’s processor customers like Apollo and Sun eventually began to develop their own processors using the RISC architecture in a bid to build more powerful workstations. Meanwhile, Intel continued to gain market dominance and became the standard hardware platform for PCs when IBM clone makers such as Compaq and Dell lined up to buy its processors.

Mobile: Another Lost Opportunity

The up-and-coming mobile market—nearly as big as PCs—marked another lost opportunity for Motorola SPS. The company developed world-class chips for its mobile phones during the 1980s and 1990s, but it failed to commercialize them because Ericsson and Nokia—the two other large mobile phones makers—simply didn’t want to buy components from their archrival.

During the 1990s, TI devoted vast engineering resources to Ericsson and Nokia for the development of platforms based on its mobile chipsets. As a result, TI sewed up the mobile processor market. And Motorola lost a profitable business of selling chips to outsiders.

Motorola Dragonball powered the iconic Palm handheld computer

Another setback for Motorola SPS in the 1990s came when Palm—the leading manufacturer of handheld computers in the pre-smartphone days—dumped Motorola’s Dragonball processor for StrongARM processors. Dragonball processor—one of the early mobile system-on-chips (SoCs)—had become a de facto hardware standard for handheld computers also known as PDAs.

Embedded Market Leadership

Nevertheless, Motorola SPS scored important design wins in automotive electronics during the 1990s. The firm was the driving force behind intelligent power switches for the realization of anti-lock brake system (ABS). Next, Motorola launched one of the first microelectromechanical systems (MEMS) as an inertial sensor for vehicle safety airbags.

Another significant design victory came in 1996 when General Motors used Motorola’s MPC5200 microprocessor in its OnStar telematics system. In retrospect, Motorola’s grasp on embedded processors developed with the formation of the PowerPC alliance in 1991.

Motorola SPS was a pioneer in automotive electronics

IBM and Motorola had joined hands for the creation of a new microprocessor design in order to satisfy Apple’s desire to move beyond the 68000 processor architecture for its personal computers. However, the PowerPC architecture provided an optimal foundation for embedded designs because it packed the RISC core and a number of peripherals on a single chip.

Finally, Motorola SPS was able to establish the leadership position in a lucrative new market: embedded processors. Motorola took the PowerPC platform to smaller embedded processors and started supplying them to network equipment manufacturers like Cisco and Lucent. But then ARM’s RISC-based processor cores began to dominate the embedded market, and Motorola began losing leadership in a profitable market.

The Making of Freescale

The management focus or the lack of it wasn’t Motorola’s only problem. The 1990s also marked a turbulent period for Motorola SPS at the top. Motorola SPS president Hector Ruiz—who later became CEO of AMD—famously carried out three corporate reorganizations in three years.

Ruiz, who coined the term digital DNA, had a mixed legacy at Motorola SPS

Then, Apple Computer, Motorola SPS’ largest customer, wasn’t happy with PowerPC processors for its laptops. Apple was constantly pushing Motorola SPS for better and faster processors. So in the late 1990s, Wall Street began to pressure Motorola CEO Chris Galvin to shed off the company’s semiconductor operation.

In 1999, Motorola was finally ready to let go its unsung hero.

Stay tuned for the next blog about the start and end of Freescale Semiconductors.

Also read:

Freescale: The End of a Long Journey – Part I