Introducing the customised silicon chip that does it all

Innovation: Californian leader in hi-tech market comes to Britain

THE WORLD'S leading producer of customised silicon chips has chosen Britain for its expansion into Europe, moving its European headquarters from Munich in Germany to Bracknell, Berkshire.

LSI Logic, a Californian company founded by a Liverpudlian, believes it will be easier to find engineering talent in Britain. It plans to recruit about 100 high-level engineers. "The UK also provides a friendly business environment," said the general manager, Moshe Gavrielov.

This should be good news for the hi-tech M4 corridor, because LSI Logic is at the heart of one of the fastest-growing hi-tech areas: games computers that are more powerful than their so-called professional counterparts.

The company was started in 1981 by Wilf Corrigan, and was one of the first to use semiconductors for specific applications, rather than the "commodity chips" made by most of the industry. It has now moved into what it calls Coreware technology, which makes it possible to combine all the elements of a computer on a single silicon chip.

Its latest and most high-profile design is the chip for Sony's Playstation, a video games machine capable of handling 500 million instructions per second. This is expected to cost less than $400 (£250) when it is launched in the US this spring, and is 2.5 times more powerful than a $2,000-plus personal computer with an Intel Pentium chip.

The Playstation requires this power to provide the realistic 3-D graphics Sony needs to leapfrog the entrenched leaders of the computer games market, Sega and Nintendo. When it went on sale in Japan in December 1994, the Playstation sold 100,000 units in the first day.

LSI Logic's chips will be featuring in other entertainment systems. The company is developing an interactive cable television unit for Hewlett- Packard, which will sit on top of the set to unscramble video and audio signals and handle services such as home shopping and banking.

The company's techniques are also being applied to bring down the cost of a range of business equipment such as printers, telephones and switches in data networks.

For example, LSI Logic has integrated all the logic and processing needed to run a sophisticated laser printer on to a single chip for the manufacturer Oki. The printer is little bigger than the A4 paper on to which it prints.

It is also developing a chip for a mobile telephone that will respond to voice commands.

The company ran into trouble after the end of the Cold War because it relied heavily on the defence market. But the introduction of Coreware brought it back from a loss of $110m in 1992 to a profit of $54m in 1993.

LSI Logic is the biggest foreign semi-conductor company in Japan. This must be especially satisfying for Mr Corrigan who was one of the founder members of Sematech, the US industry body set up in the mid-1980s to redress the trade imbalance in chips between the two countries.

The key to Coreware is that a range of industry standard products can be assembled on a chip in way that leaves enough space to allow it to be differentiated from its rivals. In the case of the Sony Playstation, about 85 per cent of the system is standard, the rest is specific - and proprietary.

Using existing and standard components makes it cheaper and faster to develop new chips, which are nevertheless different and patentable.

The list of LSI's clients is a roll-call of all the big computing, telecommunications and electronics companies including IBM, Alcatel, Philips, Siemens, Apple, Digital, Ericsson, Sharp, Olivetti and Unisys.

Mr Gavrielov said that European manufacturers have fallen behind the US and Japan in the development of computer-on-a-chip products. "I think we will improve the competitiveness of our European customers by enabling them to speed up the introduction of new, multimedia products," he said.