Smart-phone microchip deal is the call Wolfson has been waiting for

Published on Monday 14 June 2010 19:56

ELECTRONICS giant Samsung has revealed that it is using microchips designed in Edinburgh in two of its latest smart phones, giving a boost to supplier Wolfson Microelectronics.

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Wolfson, which has suffered a few setbacks in recent months, said its latest chip – which processes a range of audio signals including phonecalls and music – has been built into Samsung's Wave and Galaxy S phones.

The company is rarely given permission by its customers to publicise their contracts, but the latest deal sent shares up as much as 3 per cent yesterday.

Wolfson, which was spun out from Edinburgh University in 1984 and floated on the stock exchange in 2003, refreshed its product range last year.

Derek Milne, the company's product marketing manager, said Wolfson had spent last year beefing up its range of high-definition (HD) audio chips. He told The Scotsman: "If you go back a few years, mobile phone users just wanted to make calls or send text messages.

"Now they're listening to music and they want quality to be as good as on their MP3 players – that's what our new chips are offering."

Milne said the chip improved the audio quality of the mobile phone by increasing the signal-to-noise ratio by 16 times compared with standard phones. He said Wolfson had secured about 250 design wins last year – in which customers chose its chips to use in new devices.

A further 90 design wins were added to the order book during the first quarter of this year.

He said there was always a lag between the design wins and then the devices working their way through to volume manufacturing, which the Samsung had now reached.

The chips will be used in the Wave, which boasts two gigabytes (GB) of internal memory and a music and HD video player, and the Galaxy S, which combines Google's Android operating system with 16GB of memory, a four-inch touch-screen and a five mega-pixel camera that can record HD video.

The contract win comes as a boost to Wolfson, which confirmed in February that it had lost a key contract with Apple after missing deadlines.

Milne said the latest deal – which builds on existing contracts with the South Korean electronics giant – was a boost to Wolfson and could lead to further design wins with other customers.

Didier Scemama, an analyst at RBS Equities, said: "Wolfson shipping its audio hub chip on the Wave and Galaxy S platforms is positive, and we would like to see more of the company's current 340 design-ins at customers translate into major shipping products."

RBS Equities maintained its "hold" recommendation on Wolfson, with shares ending the day up 3.25p at 168.75p.