Goodbye OMAP? Texas Instruments to stop investing in mobile processor business

Texas Instruments has announced it will stop investing in mobile chips, and turn its attention to the "embedded processor" market instead.

The saying goes “when the going gets tough, the tough get going,” however it appears Texas Instruments took it in a slightly different way to the rest of us, as it has announced it’s taking a step back from the incredibly competitive mobile processor market.

It was TI’s Senior VP of Embedded Processing Greg Delagi who announced the news at an investor meeting on September 25, saying “the [smartphone] opportunity is less attractive as we go forward,” and talked about the market being “dominated by a couple of players.”

While Texas Instruments may not be as well-known as Qualcomm or Nvidia, it is America’s second largest chip manufacturer and its OMAP processors can be found in devices such as the Amazon Kindle tablet, B&N’s new Nook tablets, a wide variety of Huawei smartphones, the Panasonic Eluga, several Motorola Droids and Kobo’s new range of Android tablets too.

Texas Instruments may be taking a step back, but it’s not a total retreat, as Delagi promised that it would continue to support smartphones and tablets that use OMAP chips, but wouldn’t be dedicating the same level of investment as it had done in the past.

What this will mean for the forthcoming OMAP 5 isn’t clear. This exciting chip is expected to start appearing in devices towards the end of this year or early next, and uses ARM’s dual-core Cortex A15 architecture, much like Samsung’s Exynos 5 Dual. A video showing an early test indicated the OMAP 5 was set to be quite a beast, so let’s hope it’s still on its way.

So what will Texas Instruments be doing instead? It’s going to concentrate on something called “embedded processing,” where chips are used in appliances, big industrial machinery and most importantly, cars. Delagi showed the embedded processing market to be worth $18 billion, and that the automotive slice of that pie was worth $6.5 billion alone.

The news has seen Texas Instruments’ stock take a fall, and analysts voice their concern over the decision. That said, others predict that if embedded processing takes off, the move could be very profitable.