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Comms chips

Chip Makers Face Awareness Problem

Telecom equipment manufacturers are failing to shop around for the best deals for communications chips, judging by the results of the latest market perception survey from Heavy Reading, Light Reading's market research division.

The 2004 Communications Chips Market Perception Study indicates that most purchasers of communications chips are aware of less than half of the players in any given product category. In other words, there's a good chance that they're missing out on better products, lower prices, or better service and support. Likewise, comm chip companies are missing out on capturing new customers.

This isn't a case of Heavy Reading surveying nincompoops. The 449 folk who took the survey were screened to make sure they really worked for system vendors, original equipment manufacturers, or system integrators. Then they were given a list of 31 product categories and asked to select the ones with which they were familiar. For each of these product categories respondents were then shown a list of suppliers and asked to identify the ones they recognized (see Chips on Their Shoulders).

In all but one product category, field programmable gate arrays, respondents on average failed to recognize more than half of the players.

In some cases, the recognition ratio was much lower. On average, respondents could recognize fewer than one in four vendors among manufacturers of content processors and circuit emulation chips. And they could recognize fewer than one in three vendors among suppliers of Ethernet MAC chips, VOIP chips, modulator driver chips, pre- and post-amplifier chips, backplane transceiver chips, security processors, ATM switch fabrics, ATM SAR chips, and ATM interworking chips (see table below).

It's worth pointing out that some big names were included among players that weren't widely recognized. The most striking example of this is Intel Corp. (Nasdaq: INTC). It has products in 16 of the categories surveyed, but only made it into the top three places in terms of name recognition in eight of them (see Survey Rates Chip Suppliers).

Conversely, some startups made it into the top three spots in a handful of product categories. These include Passave Inc. (PON chips); Big Bear Networks, and Phyworks Ltd. (dispersion compensation chips); EZchip Technologies, Azanda Network Devices, and ZettaCom Inc. (standalone traffic manager chips); NetLogic Microsystems Inc. (search engines) and Cavium Networks Inc. (security processors).

Table 1: Recognition Rates
Average Percentage of Vendors Recognized by Survey Respondents Number of Vendors Listed in Product Category Number of Respondents
Telephony (PDH) Chips 42% 14 77
DSL Chips 47% 13 82
PON Chips 43% 4 48
Ethernet PHY Chips 33% 17 114
Ethernet MAC Chips 32% 12 109
Ethernet Controller Chips 40% 7 93
Ethernet Switch Chips 40% 10 106
VOIP Chips 28% 19 67
Communication Processors 38% 10 109
Laser Driver Chips 35% 11 57
Modulator Driver Chips 30% 10 35
Pre- and Post-Amplifier Chips 32% 10 40
Crosspoint Switch Fabrics 35% 8 55
Sonet/SDH Data Transceivers 27% 20 84
Dispersion Compensation Chips 36% 6 28
Framer/Mapper Chips 40% 13 84
Digital Wrapper/FEC Devices 36% 6 42
Backplane Transceiver Chips 27% 21 51
Circuit Switch Fabrics 42% 7 58
Network Processors 38% 12 117
Standalone Traffic Manager Chips 34% 12 39
Search Engines 33% 10 24
Content Processors 21% 5 29
Security Processors 31% 10 40
Packet Switch Fabrics 35% 13 57
ATM Switch Fabrics 30% 9 41
ATM SAR Chips 28% 14 46
ATM Interworking Chips 29% 8 31
Circuit Emulation Chips 24% 5 23
Control-Plane Processors 35% 11 50
Field-Programmable Gate Arrays 57% 7 105
Source: Heavy Reading's 2004 Communications Chips Market Perception Study


— Peter Heywood, Founding Editor, Light Reading


Heavy Reading's 99-page 2004 Communications Chips Market Perception Study costs $3,750 - which includes access to a searchable online database for slicing and dicing results by demographic, geography, and organization type. For more details, click here.

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fw23 12/5/2012 | 2:39:46 AM
re: Chip Makers Face Awareness Problem
Could it be that the disruptive change from
electrical to optical components in the world's
networks also partially explains the results?

I mean lots of the ===MOVERS <and> SHAKERS===
in this crazy business concluded last year
that electrical networks are on the downhill
slope to oblivion. LIGHT based communications
is poised to rapidly displace all of this
electrical stuff.

So rather than an awareness problem, maybe
its that most people at the companies looked
at by the SCIENCE of HEAVY READING just are
not up anymore on legacy technology that for
them has gone the way of the do-do bird.

I wonder in five or ten years time, as LIGHT
based communications grows, if we will look
at these "chip" things the same way we look
at Vaccume tubes today.

I would guess that Vaccume tube manufactures
might get higher awareness ratings than some
of the dead-enders in electronics like Easy
Chip.

</and>
fw23 12/5/2012 | 2:39:46 AM
re: Chip Makers Face Awareness Problem
More science from HEAVY READING. When I
look at the -->TOP LINE<---, in all this, I
see a whole industry with problems similar to
troubled Juniper networks. Lots of brain-boys
pouring cash into techno-bees down on the plant
floor while AWARENESS is IGNORED.

I was really shocked at how badly a formerly
/*\*/RED--HOT/*\*/ company like Intel had
STUMBLED in brand awareness. Too many trips
up to Redham for those boys I think.

The -->ACTION PLAN is obvious for those who
are actually LISTENING rather than having
their h-e-a-d-s i-n t-h-e s-a-n-d.

To make money, people have to know what you
make. Brand awareness and marketing are the
[KEY] that fits that lock.

Its too late for the superbowl, but a word
for those in the know ---FRIENDS--- HINT! HINT!
in the SPRINGTIME are not a bad think to have.

And for a company like Intel, Stars on america's
mind like Ray Romano and Matt Leblank (the new
Tony Danza) would be great spokespeople for those
with the BUCKS.

For startups who think they dont have the money
to play the media game, I can offer the following
pearl of wisdom to the peanut gallery....
....get big or get out!

fw23 12/5/2012 | 2:39:45 AM
re: Chip Makers Face Awareness Problem
I'm wondering if anyone in the peanut gallery
has any opinions on the future of FPGAs. I've
been told by several people that FPGAs were
a fad that came about because many companies
could not afford to do real designs anymore
and because of the shortage of brain-boys
who build these things.

I look at the survey and it looks like the
decision makers have given up on FPGAs. Like
its a dead end technology that everyone on
the shop floor is washing their hands of now
that GRADE-A talent is back available on the
market again.

alchemy 12/5/2012 | 2:39:44 AM
re: Chip Makers Face Awareness Problem fw23 writes:
I'm wondering if anyone in the peanut gallery
has any opinions on the future of FPGAs. I've
been told by several people that FPGAs were
a fad that came about because many companies
could not afford to do real designs anymore
and because of the shortage of brain-boys
who build these things.


In startup-land, FPGAs are incredibly valuable. You can get a product to market quickly without the huge expense of going the ASIC route. You can also get your product limping on partially complete designs and implementations. You'd never dream of doing that with an ASIC and that can be the difference between getting VC funding or not. You also have the ability after-the-fact to fix bugs. As complexity increases, so does the likelyhood that your test process won't catch all the bugs. Personally, if an engineer walked into my office at my startup company and said we should build an ASIC, I'd thow him out the window.

fw23 12/5/2012 | 2:39:44 AM
re: Chip Makers Face Awareness Problem
Another thing the guys told me is that FPGAs
turn responsible designers into hackers. They
cease to be careful and you end up with
spaghetti hardware rather than a sound design.

If I'm building a product, why would I want
a limping wounded product even if I had it
faster? Whats the advantage to having something
faster that is damaged?

I know that procket, which is bleeding edge in
everything, took a look at this stuff and
decided that total custom electronics was the
way to go. That pre-made chip packages,
FPGAs and such were the wrong direction. They
used to have a great paper on the logic they
used at their company website.
waverunner 12/5/2012 | 2:39:43 AM
re: Chip Makers Face Awareness Problem I can see two reasons for this:

1) The survey was sent to the wrong target respondents, namely purchasing. Purchasing has little if any influence in the selection of components, most of the legwork and decison process is in the hands of the designer with purchasing having to deal with it after the fact. This group would be aware of only what's on legacy BOM's, meaning the short list of incumbent suppliers.

2)The electronic component market is made of "Gathers" in the sales force. Traditionally, they have trusted rep companies to represent their products, there are numerous reasons for which I will not mention here, these reps are nothing more than gathers of information, they do little in promoting the products they represent, and you know what I would do the same because they are levelled with 30day contracts, and are dropped and added depending on which way the wind is blowing.

Same goes for the internal salesforce, ask them about their accounts and they could tell you applications, design wins, the designer's name, the project name and that's where it ends, passive gathering of information. They do not active tacticians and do little in engaging revenue.

If your in this industry read "Engaging the Design Flow, Design Winning Sales."

Waverunner
opticalwatcher 12/5/2012 | 2:39:43 AM
re: Chip Makers Face Awareness Problem "If I'm building a product, why would I want
a limping wounded product even if I had it
faster?"
fw23, read!
Here's the post you replied to:
"You can also get your product limping on partially complete designs and implementations....and that can be the difference between getting VC funding or not." Also, FPGAs are good for prototyping. Even Procket did some 'partially complete' prototyping of their software using PCs.

Certainly if you are designing your own bleeding edge network processor or switch, like Procket did, then full custom ASIC is the way to go, especially if you have lots of VC money during the bubble period.

For the rest of us mortals who buy these products rather than design them, we use FPGAs to connect everything together. Maybe if the company hits it big you can convert the FPGAs to an ASIC for lower per/unit cost (but much higher NREs).

FPGAs are NOT a passing fad. Xilinx made over $1 billion last year.
icenine 12/5/2012 | 2:39:43 AM
re: Chip Makers Face Awareness Problem Gaining market share and awareness for startups is no just a matter of spending money in the media. Yes, all bases need to be covered. Today the Approved Vendor List is king. Cisco, Nortel, Juniper, etc. have AVLs that freeze out the startups.

Getting a meeting at one of these big guys to explain your new technology is easy. They love to learn what is going on. Turning that to a design win that makes the big guy dependent on the start up? Not so likely.
technonerd 12/5/2012 | 2:39:41 AM
re: Chip Makers Face Awareness Problem I mean lots of the ===MOVERS SHAKERS===
in this crazy business concluded last year
that electrical networks are on the downhill
slope to oblivion. LIGHT based communications
is poised to rapidly displace all of this
electrical stuff.

Ain't it great to see the speculators back in the pool?
PO 12/5/2012 | 2:39:41 AM
re: Chip Makers Face Awareness Problem "I'm wondering if anyone in the peanut gallery
has any opinions on the future of FPGAs. I've
been told by several people that FPGAs were a fad that came about because many companies could not afford to do real designs anymore and because of the shortage of brain-boys who build these things.

...

"Another thing the guys told me is that FPGAs
turn responsible designers into hackers. They
cease to be careful and you end up with
spaghetti hardware rather than a sound design.
"

Now that much of hardware design has the characteristics of software design, the discipline of software development must be applied. You'll find plenty of software hacks, and I'm sure plenty of hardware hacks too. But you can also tell the difference between a designer and a programmer.

At the same time, software best-practises are no longer based on flowcharts, bubble diagrams, and the like: the state of the art has advanced.

We will not regress into ASIC development. We might advance into other special-purpose processors (e.g. Network Processors), but forklift upgrades are not acceptable in the market anymore.
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