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Sierra Strikes Forth for 100G

Craig Matsumoto
3/17/2009
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Sierra Monolithics Inc. had a chip market all to itself at 40 Gbit/s, but the company is going to have to deal with more competition as the 100 Gbit/s generation comes along.

The privately held company is trying to get a headstart, at least, having announced its SerDes chips yesterday. (See Sierra Reaches 100G.)

The chipset is called Theta, and it's the 100-Gbit/s followup to Sierra's Epsilon chips for 40 Gbit/s. Theta targets long-haul telecom as well as enterprise 100-Gbit/s Ethernet.

Sierra is no bubble baby. Founded in 1986 (!), it got its start selling chips into military and defense applications. In 2002, as the optical boom was ending, the company decided to try its hand at the commercial market, designing chips for 40-Gbit/s transport and WiMax.

Stories like that tend to finish with the company getting slaughtered by the long-lingering telecom downturn and escaping into another business like wireless or biotech or hamburger flipping. But Sierra was able to live off its military business, which meant it kept its chips around as the industry started moving to 40 Gbit/s.

And once 40 Gbit/s started happening, Sierra hit paydirt. "We were really the only supplier of working 40-Gbit/s SerDes," says Taqi Mohiuddin, a Sierra director of marketing.

The rewards were ample. Sierra finished 2008 with about $50 million in revenues, officials say -- about 60 percent of which came from the SerDes market. That includes a smattering of 10-Gbit/s SerDes sales, but it still pegs 40-Gbit/s SerDes as a rich vein to tap.

And that's why CoreOptics Inc. -- an optical subsystems vendor -- came out last June with its own 40 Gbit/s SerDes. (See CoreOptics Intros 40G Serdes.) And CoreOptics says it intends to be ready at 100 Gbit/s, too.

"We weren't originally planning to do ICs, but we were encouraged by a lot of our customers who said we should do this," says Saeid Aramideh, CoreOptics's vice president of marketing.

It was only natural for somebody to try it, since single-supply parts can cause trouble for systems vendors. A year ago, Opnext Inc. (Nasdaq: OPXT) announced a weak quarter; among the issues it cited was a problem with a new type of 40-Gbit/s mux/demux chip. (See Opnext Lowers Q3 Outlook.) The number of suspects wasn't big.

Sierra expects to start sampling Theta next month, which could put it on target to fuel carrier systems in mid-2010, when the Institute of Electrical and Electronics Engineers Inc. (IEEE) standard for 40- and 100-Gbit/s Ethernet is due to be ratified.

CoreOptics intends to get a 100-Gbit/s proof-of-concept demo wired up this year. Only after that's done will officials start discussing their exact 100-Gbit/s SerDes product plans.

CoreOptics would use that chip in its own transponders, being better known as a subsystems vendor than a chip vendor. But the company is open to selling its 100 Gbit/s chips elsewhere. "The key question is: When do you want to make this chip available? Our point of view is, the market ramp will not start until 2011 at the earliest, or 2012," says Aramideh.

In the meantime, Sierra expects the 40-Gbit/s market to remain kind, even though the world's economy is in the dumpster. "It seems a lot of the 40-Gbit/s efforts planned in 2008 are going to be continued in 2009. They don't seem to be as impacted as other areas of capex spending," Mohiuddin says.

— Craig Matsumoto, West Coast Editor, Light Reading

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