The chips in question target next-generation Sonet transport, using features such as Generic Framing Procedure (GFP) and the Link Capacity Adjustment Scheme (LCAS) to efficiently pack Ethernet feeds onto Sonet (Synchronous Optical NETwork) and SDH (Synchronous Digital Hierarchy) pipes. Such features have been all the rage as carriers look to connect more Ethernet traffic to installed networks (see Sonet Chips Aim for the Edge and Why Sonet Chips Are Sexy).
PMC got into the market early with its Arrow product families targeting speeds up to OC48, and it built a lead that should last through 2005. But as EOS mapper chips ramp into heavier volumes in 2006, PMC will face tough competition, according to the "Guide to Next-Generation Sonet Silicon" released this week by The Linley Group.
"PMC is shipping the bulk [of EOS chips], but a lot of the new designs are going to other folks," says Linley Group analyst Jag Bolaria.
Specifically, Agere Systems Inc. (NYSE: AGR.A) and TranSwitch Corp. (Nasdaq: TXCC) began sampling their DataMapper and EtherPhast chips this year. Both show more advanced integration and features, providing single-chip OC48 options as opposed to PMC's multiple-chip offering. Relative newcomer Galazar Networks Inc. is picking up some customers as well with its MSF250 chip, Bolaria says. (See Agere Targets VOIP, Video, TranSwitch Intros Grooming Chips, and Galazar Garners $15.4M.)
In part, this is happening because the companies that got into EOS early -- such as PMC, Cypress Communications Inc., and Vitesse Semiconductor Corp. (Nasdaq: VTSS) -- appear to have put the brakes on development.
"They're looking to do minor tweaks" instead of major updates of their products, "so you get these guys like TranSwitch and Galazar that can come along and pick up some business," Bolaria says. As for why PMC and others would slow down development, Bolaria points to the expense required to get chips designed into systems; it's not a cheap process, and some companies might be wary of throwing too much R&D money into what is still a small EOS market.
At the same time, the difficulty of landing design wins means PMC should enjoy its market share for a while, buoyed by its incumbent status, Bolaria says.
The Linley Group report also looks at chips for Resilient Packet Ring Technology, which can parcel bandwidth in ways similar to next-generation Sonet. Bolaria notes the EOS market is likely to be larger, though, because the technology is better suited for access networks, where carriers are more likely to spend money.
— Craig Matsumoto, Senior Editor, Light Reading
For more on this topic, check out:
- The Light Reading Insider report:
— Next-Gen Sonet/SDH Chip Survey
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