Texas Instruments Inc said it expects to produce a single-chip wireless handset by 2004, and will offer handset makers a two-chip solution as early as net year.

The single-chip phone has become a holy grail of the communications industry, which currently requires four processors and a host of auxiliary components to build a modern phone, but TI believes it now has a clear lead, and is only likely to be challenged by Intel Corp, which it claims is up to three years behind it in the development race.

Single-chip phones will be cheaper to build, smaller, and far more power-efficient than today's handsets, and are considered a prerequisite for phone manufacturers to begin to truly exploit the broadband wireless communications systems that are now beginning to be installed.

However, phones, with the amalgam of analog and digital function, are difficult devices to design on to a single piece of silicon, and it has taken a major and risky development effort by TI to begin to crack the many problems that single-chip phones present.

To date, this effort has focused on the development of TI's OMAP DSP range, which currently handles the division of tasks in mobile phones between digital and analog domains. However, next year, TI will condense these two domains into two chips, one for running the baseband radio functions, and another for handling the digital processing of radio frequency conversion. Ultimately, the analog and digital domains will be integrated on a single part.

Announcing TI's plans, company CEO Thomas Engibous, said that TI is now outstripping potential competitors such as Qualcomm Inc and Motorola Inc, and has a clear lead over Intel, which is working on an "internet-on-a-chip" design with Analog Devices Inc that is not likely to see the light of day before 2007.

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