Canadian chip firm Wavesat said it raised $14.4 million in a round of new funding for its manufacture of chips for 4G cellular phones.

The Montreal-based company raised the money from existing investors DR Capital, BDC Capital and Multiple Capital. DR Capital led the round. Founded in 1993, the company makes multi-protocol chip sets that can process signals from a variety of 4G cellular networks. These networks, just in the beginning of deployment, are able to offer high-speed data service as well as voice. The chips can handle wireless radio protocols like WiMax, Wave2, XG-PHS and LTE as well.

85-employees strong, the company introduced its Odyseey multi-protocol architecture in May 2008, and it has already been adopted by many customers. Compal, a leading contract manufacturer of phones, is using the Odyssey chips in mobile WiMax universal serial bus add-on devices. Another client is Willcom, a wireless network operator in Japan.

Rivals include Sandbridge Technologies, which launched a new generation of chips in November, and Altair Semiconductor, which raised $22 million in September. This competition is going to be interesting to watch because 4G networks are going to be very demanding. They require high performance as well as power efficiency to ensure that cell phones using the chips have both good reception and long battery life. Other big players in the market are Texas Instruments and Qualcomm.