DALLAS -- This week Texas Instruments Inc. announced that it has developed a "reference design" for an optical wireless system that gives end users a dedicated 100-Mbit/s connection to their local area network (see TI Touts Optical Wireless Advance). While the achievement of an infrared connection that equals a fast Ethernet hookup is impressive, what Texas Instruments is really doing here is tossing a Hail Mary pass to revive their digital signal processor (DSP) business, which has slumped of late (along with the rest of the telecom sector).

To wit, the reference design TI is providing networking equipment makers combines one of TI's analog micro-electrical-mechanical system (MEMS) mirrors, an optical transceiver, and DSP components. The DSP, aided by some fancy locking and tracking software, aims the mirror quickly and precisely to enable connections between, say, several cubicle-mounted devices and a base station near the ceiling at the middle of an office.

Aside from the in-building wireless LANs, TI's expertise in intelligently directing light has several other applications, says Matt Harrison, the business manager in the optical wireless group. He suggests that, if packaged right, the technology could be used in photonic edge switches; it could help improve free-space optics gear, such as the transceivers sold by TeraBeam Corp.; and it could provide high-speed residential hookups that are cheaper than copper or cable.

In other words, Harrison's group is tossing the ball high and long, hoping that some equipment makers will get under it, find a sustainable market, and score some revenues. That's not such a bad thing, really. The idea of betting the technology's future solely on an optical wireless LAN product would have indeed been much more grim. Even Harrison candidly admitted that a lot of the companies that TI is working with to create wireless LAN products "probably won't have the same name in a couple of years."

An interesting aside about TI's announcement was the company’s use of the term "optical networking," words with which TI is not synonymous. TI has long been a player in components and chips used for assorted communications applications, such as its Sonet/SDH chips (see TI Launches Sonet Transceiver). But the company's perception as an optical player trails rivals JDS Uniphase Inc. (Nasdaq: JDSU; Toronto: JDU), Corning Inc. (NYSE: GLW), and Applied Micro Circuits Corp. (AMCC) (Nasdaq: AMCC). Earlier this year, though, TI laid the groundwork to change that, as it told analysts that it expected optical switching, attenuators, and tunable lasers to be key areas of growth for its DSP business.

In its December 2000 quarter, TI's sales for DSL, cable, and other broadband gear amounted to about $70 million -- small potatoes, considering its overall semiconductor revenues for that quarter were $2.7 billion. During its most recent earnings call, TI indicated that semiconductor orders, used to gauge its future financial results, were down 42 percent from last year.

TI doesn't specifically break out its optical networking-related sales, but Charles Marinello, who directs sales and marketing for TI's optical networking segment, says the company will do "hundreds of millions of dollars in optical-related business" this year. So, for the moment, TI's stature as an optical networking powerhouse is solid inasmuch as firms waving that banner have slipped out of favor with investors.

-- Phil Harvey, Senior Editor, Light Reading http://www.lightreading.com