A wealth of new handsets, netbooks, and high-volume CE devices could be enabled in the coming year by a key innovation IBM announced yesterday: a service in which it builds low-power composite design chips using ready-made IP libraries.

With the handset and small device space being opened up by new platforms such as Android, mobile Linux, and the royalty-free Symbian, opportunities are arising for more vendors -- some of them major players, some of them newer ones -- to come to market with fairly high-performance hardware. But up until recently, the possibility of making a high-performance handset was out of reach for many vendors, including the smaller ones that can't yet even afford completely custom design.

That may have changed yesterday with the entry into the market of manufacturing of a new service from IBM. It's an option that enables companies to license building blocks of technologies from ARM and other suppliers, mix and match them to develop a workable composite design, and then have IBM produce those designs using energy-saving silicon-on-insulator (SOI) processes at the 45 nm level.

"The gap is closing in terms of complexity," stated Duncan Needler, IBM's program manager for semiconductor solutions, in an interview with BetaNews, "and that's a reason why we believe the time has come for SOI."

SOI is one of the design techniques that IBM's partner AMD has used to its advantage for years in its CPU market war with Intel. Historically, Intel's production processes use what's called bulk silicon, which is less expensive to produce. Recent advances by Intel, including a formula for using high-k+metal-gate substances in lithography, have helped solve the power leakage problem in its designs.

IBM, meanwhile, has had SOI as one of many tools in its arsenal; though it also produces chips with bulk silicon for itself and its customers, Needler tells us that SOI already gives its foundry clients most of the benefits of lower lithography levels. That's why going with 45 nm SOI now, rather than waiting for the 32 nm generation to roll around.

"If you understand the reasons why people move from one technology to the next -- i.e., 45 to 32 -- what are the things you're looking for? You're looking for increased performance, reduced power, and above all, you're looking for increased density," said Needler. "Density means size, size means cost, and cost means profit. In SOI, you're taking two of the three of those reasons to move, and providing them without moving. I would venture to say that moving from 45 bulk to 45 SOI, if your application demands it, probably gives you a better performance increase than moving from 45 to 32."

SOI had been IBM's high-end option for its foundry clients. But now, by offering building blocks for manufacturing clients in the form of IP libraries from ARM and others, Needler says IBM can now use SOI to address a growing demand by handset and small device manufacturers for high performance with relatively low power drain. IBM will eventually offer options with even lower power drain, but that will come at a performance cost; for now, he told us, this new "foundry offering" addresses a sweet spot in the market.

"If you're looking for intermittent, media-rich downloads to a cell phone, you might choose SOI just for the performance and the low active power that you can realize," said Needler.

Just what is it that IBM is offering here? As Needler explained, a manufacturing facility such as IBM has three classes of customers. One is the application-specific segment (ASIC), where the customer presents a complete electrical schematic (the "front end") to IBM, which is then responsible for managing the production and packaging process (the "back end"). Higher up on that scale is the full custom design, in which all of the intellectual property is owned by the customer, while IBM provides the elbow grease.

This week's new offering is on the opposite end of that scale, which presents other classes of customers with cost-saving shortcuts.

"In the foundry offering, we provide intellectual property, we provide a library," Needler explained to BetaNews. "A library basically is a suite of elements -- building blocks, if you will -- that have been designed specifically for the technology. We offer that level of enablement, we have worked with the EDA [electronic design automation] providers such that their tools work with both the libraries and our technology, and the client then has a suite of building blocks and tools with which he can develop a chip -- the difference being that the client does the physical design, [and] is responsible for the yield management, the packaging, the testing, but we simply build the product. So we don't have a higher-level business contribution. That's what we're enabling today.

"Typically you go to a foundry business model when you are trying to optimize costs," he continued. "A foundry offering is typically the cheaper of those three choices, and so now we're enabling...the conduit to a cadre of clients that are typically higher-volume, cost-oriented, and performance-oriented."