Chips Face Access Hurdles
That's one of the less cheery conclusions in the latest Light Reading Insider report, IP Network Line Cards: Next-Gen Challenges.
"Today's network line cards are not up to the task of NGN [next-generation network] processing and will need additional cost reduction," contributing writer Rhondalee Rohleder states in the report.
In part, that's because of a suspicion that the access network is where services processing will happen. That would let the carrier distribute the network's intelligence, keeping the center of the network relatively "dumb' -- a model that's been discussed for a very long time.
But access boxes sell for lower margins than metro and core boxes. Equipment providers face increased competition in the access market.
To speed design times, vendors are turning to the chip industry to provide more of what they need -- great news for vendors of parts like network processors. But the chips are having trouble meeting vendors' requirements for high intelligence, low cost, and low power consumption.
They'll get there, but there's going to be some carnage along the way, the report states. A lot will depend on the strategies chosen by the chip vendors. Some can afford to balance access and metro offerings, exploiting the fact that the emergence of a smart access network is going to take time. "A dramatic change in the metro edge will not come overnight," the report says.
Others will have to pick their poison -- specializing in metro or access -- or lean heavily on software for a competitive advantage. The latter strategy plays into the whole idea of Advanced Telecom Computing Architecture (AdvancedTCA) , a set of standards for telecom hardware. (See ATCA Initiates Launch Sequence.)
Whatever strategies get picked, some vendors are going to miss the cut. Access-network margins are very low, meaning only the high-volume winners can afford to stick around. "Missing major design wins in access will probably spell the end of a few silicon vendors," Rohleder writes.
The report briefly discusses the offerings of 20 silicon vendors including Agere Systems Inc. (NYSE: AGR.A), Applied Micro Circuits Corp. (Nasdaq: AMCC), Broadcom Corp. (Nasdaq: BRCM), Intel Corp. (Nasdaq: INTC), and PMC-Sierra Inc. (Nasdaq: PMCS)
— Craig Matsumoto, Senior Editor, Light Reading
IP Network Line Cards: Next-Gen Challenges, a 26-page report in PDF format, is available as part of an annual subscription (12 monthly issues) to Light Reading Insider, priced at $1,350. Individual reports are available for $900. For more information, or to subscribe, please visit: Light Reading Insider.