VentureBeat

Altair Semiconductor has raised $22 million in a third round of funding for its cell phone chips. The chips can process so-called 4G wireless technologies, such as WiMax, which brings both voice reception and high-speed Internet data connectivity to cell phones. The chips can also process LTE (Long Term Evolution) cell phone signals and XGP (a Japanese wireless technology) network calls.

The company’s ALT2150 chip, a mobile WiMax processor, is in a variety of handsets already.

The company is based in Hod Hasharon, Israel and will use the new funds to support its global expansion. The funding shows that small chip companies focusing on a niche that no one else can handle can still get off the ground and get funding.

Japan’s Pacific Technology Fund led the round and was joined by ETV Capital as well as existing investors. Altair previously raised $18 million in a second round in May 2007. While other rivals have focused on WiMax chips for laptops, Altair has focused directly on mobile devices. It faces a wide range of competitors, from Intel to Broadcom. The company was founded in May 2005.

To date, Altair has raised $48 million. Previous investors include Bessemer Venture Partners, BRM Capital, Giza Venture Capital, and Jerusalem Venture Partners.

Altair, an Israeli company, is joining the race to be at the forefront of what some believe will be telecom’s next hot trend—mobile WiMAX. Altair, which makes chips that work with mobile WiMAX networks, announces today an $18M round of funding.

Mobile WiMAX is considered attractive because, compared to Wi-Fi, it offers much greater range and broadband access, although it has plenty of critics.

Wireless is a complex space with enough acronyms—UMTS, 3G and 4G, LTE, HSPA—to make your head spin. Paul Grim recently wrote a column for VentureBeat providing an overview of mobile WiMAX and competing standards and came away critical of WiMAX.

Mobile WiMAX is being backed heavily by Intel, Motorola, Sprint, Clearwire (who recently went public) and numerous startups, although the technology remains unproven. Sprint, for instance, plans to spend $2.8 billion over the next two years to roll out WiMAX infrastructure while Intel and Motorola have invested a combined $900 million in Clearwire. According to Infonetics Research, mobile WiMAX equipment increased 35 percent in the first quarter of 2007.

Altair is one of two dozen companies leading the charge to develop reliable, power-efficient and smaller WiMAX chips. (VentureBeat recently wrote about Beceem, one of those companies.)

Chip size matters. In this case, smaller is better to fit into ever tinier mobile phones.

According to Altair co-founder Eran Ershad, his company is set to ship chips that approach existing Wi-Fi chips in size and power consumption. While current WiMAX chips are roughly 400-500 sq mm, Wi-Fi chips are in the 80-100 sq mm range, showing how far the technology still has to develop. Altair claims to be the only company whose chips are comparable in size to current Wi-Fi chips. Altair has patented technology that controls interference from Bluetooth devices, a common concern among wireless users.

Bessemer Venture Partners led the funding round along with returning investors BRM Capital, Giza Venture Capital and Jerusalem Venture Partners. Altair plans to use the funding to expand sales and marketing, notably in Asia where low-cost manufacturers are located.

References:
http://www.cellular-news.com/story/24269.php
http://arstechnica.com/news.ars/post/20070109-8582.html

Update: Separately, WiQuest, an ultra-wideband wireless chip company of Allen, Texas, has raised $28 million in a third round of financing led by Adam Street Partners. D.E. Shaw Group’s venture arm and TriplePoint Capital also invested, as did existing investors Sequoia Capital, Menlo Ventures, Palomar Ventures and iD Ventures America. See statement here.