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Cypress to acquire startup Silicon Packets

Posted: 10 Jan 2002 ?? ?Print Version ?Bookmark and Share

Keywords:cypress semiconductor? silicon packets? data communication?

Continuing its migration into the data communications market, Cypress Semiconductor Corp. has announced plans to acquire Silicon Packets Inc., a privately held developer of framer chips for 10Gbps Ethernet.

Silicon Packets' device will square Cypress off against datacom specialists such as PMC-Sierra Inc. and Applied Micro Circuits Corp. Another possible competitor is Infineon Technologies AG, through its acquisition of Catamaran Communications Inc. last year.

Terms of the deal were not disclosed. Silicon Packets was founded in mid-2000 and has 28 employees. Both it and Cypress are based in San Jose, Calif.

Silicon Packets' first product, named Felix, combined an OC-192 (10Gbps) Sonet framer and a 10Gb Ethernet media-access controller into a single chip. Originally due for a release late in 2001, the product has been delayed but is approaching final tapeout and should be ready for sampling this quarter, said Nader Raygani, Silicon Packets chief executive.

Competition for Felix includes AMCC's Khatanga and PMC-Sierra's Xenon family of 10Gbps devices. "We're going to be neck-and-neck with those guys," said Mike Bollesen, director of strategic marketing at Cypress.

For Silicon Packets, the deal represents a better "in" with customers, some of which were reluctant to talk with a single-product startup. "You need to have a line-card platform strategy," Raygani said. In particular, AMCC and PMC-Sierra have built product lines around a strategy of providing as much of a line card as possible.

High-speed physical-layer components such as Felix can command high pricesSilicon Packets' Raygani was shooting for a price around $600. But the market is also difficult because so much of the products' design is dictated by standards, making it difficult for a newcomer to stand out.

Differences come in small increments. Silicon Packets equipped Felix with the SPI-4 phase 2 interface, for 1Gbps transmission, for example, putting it one step ahead of AMCC's Khatanga, which was designed with the older SPI 4.1 and will later be updated for SPI 4.2.

In general, Cypress is shifting its business model towards data communications. Bollesen noted that datacom makes up 30 percent of Cypress' revenues but consumes more than 50 percent of its R&D budget. In addition, many of Cypress' operations have been reorganized to focus on datacom, he said.

Craig Matsumoto

EE Times

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