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Entropic Slashes 18% of Staff

Jeff Baumgartner
3/25/2009

Entropic Communications Inc. (Nasdaq: ENTR), a chipmaker and a founder of the Multimedia over Coax Alliance (MoCA) , has laid off 55 employees, or roughly 18 percent of its staff, as part of a restructuring that aims to "more closely align operating expenses with revenues."

In an 8-K issued Tuesday (March 24), Entropic said it expects the restructuring to cost $1.7 million, a figure that includes $900,000 of pre-tax restructuring charges primarily tied to employee benefit and severance arrangements.

As part of the restructuring plan, Entropic said it will shutter its operations in Nice, France, and Kfar Saba, Israel. The company has also "suspended further development" on an advanced network processor architecture and an associated home networking product that was being headed up by Entropic's staff in Israel.

Entropic said it anticipated no revenues from such a product until late 2011, noting that it expects to develop this technology through collaborations and partnerships.

Entropic wasted no time on that front, also announcing Tuesday that it will work with Cavium Inc. (Nasdaq: CAVM) on new reference designs that incorporate MoCA and are suited for fiber-to-the-home (FTTH) and IPTV service environments. (See Entropic, Cavium Connect on MoCA.)

That design will marry Entropic's EN2510 chip, the third generation of its MoCA silicon, with Cavium's CN50XX processing products. Cavium will also throw in "PureVu," a video processing tech that's designed to distribute HD in the full 1080p60 format over the MoCA network.

Entropic and Cavium claim the result will be a system-on-chip (SoC) that supports MoCA 1.1 -- a home networking technology that provides speeds up to 175 Mbit/s, distributes content up to 16 "nodes" on the home network, and cooks in "parameterized" QoS, a management technique that ensures there's enough bandwidth set aside for premium, hi-def video.

However, Verizon Communications Inc. (NYSE: VZ), an early adopter of MoCA, has said it will need the technology to produce speeds of 400 Mbit/s to suit the telco's future requirements. A 2.0 version of MoCA is in the works. (See Verizon: MoCA Needs Some Speed and MoCA 2.0 .)

Broadcom cometh
Development of the Cavium-Entropic product comes as Broadcom Corp. (Nasdaq: BRCM) enters the fold with a MoCA SoC of its own, and one that's expected to put significant price pressure on Entropic. (See Broadcom Offers MoCA.)

In January, Broadcom's senior director of marketing for cable set-top box products, John Gleiter, told Cable Digital News that cable operators are also growing interested in MoCA for multi-room DVR applications, but have historically balked at the costs for MoCA silicon.

By fusing the key elements of MoCA onto one chip and reducing power consumption, Broadcom, he estimated, will be able to reduce those costs by about half. At the time, Gleiter said Broadcom's integrated MoCA technology should see some deployments this year, but "clearly by early 2010."

— Jeff Baumgartner, Site Editor, Cable Digital News

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