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Meanwhile, specialty chip makers like Intersil, Broadcom and Agere have been facing growing competition in the Wi-Fi market from their counterparts in Asia.
But rather than sell it off all at once, Motorola will likely carve up its various specialty chip units and unload them piecemeal, he says.
There are plenty of specialty chip divisions that could be sold, including groups that make chips for various uses in the automotive and transportation markets.
But two specialty chip companies are finding they have a short-term advantage as they get ready to update their forecasts for the current quarter.
Santa Clara, Calif.-based Nvidia said it will pay $13.50 a share for the specialty chip company, a 19% premium to PortalPlayer's previous 20-day trading average.
Previously, for that kind of high performance in a networking chip, you'd have to use a much more exotic and costly chip-making process based on a material called gallium arsenide, used by specialty chip companies such as TriQuint Semiconductor or Vitesse Semiconductor.
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Such specialty chips might be ready commercially before the end of the decade.
"Companies like Cisco had to build their own specialty chips to work at high speed for the time," Mr. Bechtolsheim said.
Instead, it uses 280 specialty chips called field-programmable gate arrays and SBS's own software.
Since selling intellectual property (in this case chip design) is not yet a lucrative business, designing and selling specialty chips is the right way to go, Gwennap says.
But the revolution in deep learning has now opened the market for startups that build specialty chips to accelerate deep learning and model evaluation.
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