Chipmakers Parama Networks Inc. and PMC-Sierra Inc. (Nasdaq: PMCS) are compacting the functions of add/drop multiplexers (ADMs) onto single chips, aiming to catalyze a generation of lower-cost systems.

Working on the low end, PMC-Sierra today announced a $300 chip that could bring a pizza-box-sized ADM's price to the range of $3,000 to $5,000. Parama, likewise, is continuing to tout its own ADM-on-a-chip and a $5,000 system price, although the company has its eye on higher-end systems than does PMC. Parama will be showing its chips at Supercomm next week.

According to Parama CEO Hemant Bheda, the driver for single-chip products is the fear of low-cost competition from China, which has led both carriers and equipment vendors to rethink the ADM. That's not why Parama got started -- the company originally wanted to develop an entire system though it now sells only chips -- but it's pointing ADM vendors towards the chip camp, he says.

The most ambitious project along those lines comes from Infinera Inc., which recently revealed details of a chip combining ADM functions with WDM optics (see Infinera Declares WDM War). Parama and PMC-Sierra are taking a more down-to-earth approach, coalescing the add/drop functions onto a chip but leaving the optics -- WDM or otherwise -- up to the equipment vendor.

Parama introduced two chips in January, a lower-end device for OC3 and OC12 speeds and a second chip targeting interfaces up to OC768 (see Parama Intros 'ADM on a Chip'). The latter is a bit starry-eyed but helps draw in customers. "They want to see [the chip family] scale from OC48 up to multiple OC192s and, sometime in the future, to OC768," Bheda says.

Bolstering its low-end pitch, Parama today announced interoperability with Finisar Corp.'s (Nasdaq: FNSR) configurable optics, which can be altered in software to provide OC3, OC12, or Gigabit Ethernet interfaces. "If an OEM were to take these two and install them in a system, they could have completely software-configurable line rates," Bheda says. (See Parama Intros 'ADM on a Chip' and Parama & Finisar Intro Sonet/SDH Chips.)

Parama's chips are sampling, with general availability slated for July. Two ADM vendors are using Parama's chip and its reference designs to develop products that could surface within six months, Bheda says.

Unlike Parama, PMC is sticking to line speeds of OC12 and below with its ADM 622 family of chips. "Count the number of 10-Gbit/s rings around the world today: That's not where the money is," says Babak Samimi, product marketing engineer for PMC's service provider division. PMC's target is the pizza-box kind of ADM, a system that might even sit in the basement of an office building.

The PM5337 and PM5338 can handle up to 28 T1 lines and three DS3s. The PM5337 also adds eight ports of up to 1-Gbit/s Ethernet, a concession to a trend PMC sees of vendors "MSPP-izing the ADM, making them data capable," Samimi says, referring to the multiprotocol abilities of multiservice provisioning platforms.

— Craig Matsumoto, Senior Editor, Light Reading