Cirrus Lawsuit Casts Cloud Over NeoMagic

SAN MATEO, CALIF. - The introduction of a new line of combination mixed-signal and memory chips from start-up NeoMagic Corp. was clouded when Cirrus Logic Inc. confirmed it had filed suit against the company for allegedly stealing intellectual property.

The suit charges that former Cirrus employees who are now members of NeoMagic's top management are using Cirrus-developed technology in their products. Cirrus is seeking to stop NeoMagic from using the disputed technology, to receive all proceeds from sale of products using the technology, and to recover damages.

The suit, filed Nov. 16 in the Superior Court of Santa Clara County in San Jose, concerns an innovative technology that combines analog and digital functions with dynamic RAM on a single chip, allowing logic parts to be produced on the same fab lines as high-volume memory parts. Coupling logic and memory opens avenues to both higher integration and higher performance. For example, NeoMagic's first product-the MagicGraph-combines logic and DRAM in a high-performance, low-power, space-miserly graphics solution for notebook computers.

According to court documents, a group of executives including Prakash Agarwal-president and chief executive of NeoMagic and formerly vice president of the portable product group at Cirrus-were involved in the development of the technology at Cirrus from 1991 to 1993. Cirrus charges the group with plotting to found a company that would bring that technology to market.

Cirrus filed the suit 17 months after NeoMagic was founded (June 1993) after discovering that NeoMagic was developing products similar to devices Cirrus was planning to offer. It could not be confirmed whether Cirrus is still developing products that combine DRAM and mixed-signal circuits; a Cirrus spokesman refused to comment except to say the company was attempting to protect its intellectual property rights.

"We see no basis at all for the suit," said NeoMagic's Agarwal. "It's a case of a big company going after a small company and trying to compete in the court, rather than the marketplace."

Agarwal is confident that the suit won't have a noticeable effect on NeoMagic. "There's always some impact, but our customers shouldn't feel it significantly." Agarwal said the court is still attempting to determine whether the disputed intellectual property actually includes trade secrets or not. NeoMagic, meanwhile, has filed a countersuit charging Cirrus with unfair competition, among other things.

Other NeoMagic managers-including chairman of the board Kamran Elahian-are also from Cirrus. Elahian was a co-founder of Cirrus.

If Cirrus succeeds in its suit, NeoMagic could be hit hard because the disputed technology is vital to MagicGraph and other future products.

"Our core competency is getting analog onto DRAM," said Rick Calle, senior marketing manager. "We're the first guys to bring together base logic blocks and DRAMs. We're able to break all the rules of the past for how you were supposed to build a system."

MagicGraph uses a combination of nearly 1 megabyte of DRAM and a 128-bit internal bus for high performance. With a maximum bandwidth of 250 Mbytes/s, MagicGraph outguns 64-bit graphics controllers used in high-end desktops, Calle said. MagicGraph's performance is fairly even across all resolutions, color depths, and refresh rates.

Due to its 3.3-volt process and because it doesn't need to drive current to separate DRAMs, MagicGraph uses 50% less power than conventional graphics controllers, Calle said. In addition, DRAM integration reduces board space usage by 60%-while other controllers may need as many as four separate DRAMs.

"The semiconductor world has been trying to connect DRAM and logic for a long time," said Jerry Banks, an analyst with Dataquest Inc., San Jose, Calif. "It has been difficult because DRAM processes are different from logic processes. With 16-Mbit DRAM in 0.5-micron process with two layers of metal, it overcomes some problems."

Laptop users want as much power on their portables as they get on the desktop, said Tim Bajarin, president of Creative Strategies. "This particular chip goes a long way toward doing that," he said, adding that he thought the MagicGraph would be popular for high-end notebooks with SVGA graphics.

The MagicGraph chip is only slightly larger than a 16-Mbit DRAM and is produced in a double-layer 0.5-micron technology by a foundry that Calle declined to identify. It is priced at about $85 in 5,000s, and an estimated $75 in 10,000s. While that is much higher than most competing graphics controllers, it eliminates the expense of separate DRAMs.

MagicGraph is packaged in 176-pin TQFP. It is now in limited sampling, with full-scale sampling scheduled to begin in the second quarter and production volumes starting in the third.