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Change of guards at IDT bolsters comms focus

Posted: 28 Nov 2002 ?? ?Print Version ?Bookmark and Share

Keywords:idt? creg lang? ip co-processor? sram? communications chips?

In January 2003, when Greg Lang ascends to the CEO job at Integrated Device Technology Inc., a 1980 high-speed SRAM startup, the move will reflect the company's ongoing shift to an exclusive focus on comms space. During his 15-year tenure at Intel Corp., Lang was instrumental in driving the PC hardware firm into the communications business and helping it become a leader in Fast- and Gigabit-Ethernet product segments.

IDT's mid-1990s foray into communications silicon seems to have impeccable timing, but still, the company could not make it big the way Texas Instruments did in wireless semiconductors. Fact is, IDT did not really focus on the communications market until 1999.

By the first half of last year, the firm hit the $1 billion run rate, but then in Q3 of that same year, it saw Cisco Systems' sales drop below $10 million per quarter. Relatively, IDT was a latecomer to the comms market, but still, its revenues are two to three times that of other communications chipmakers such as AMCC and Vitesse.

Bob Wheeler, senior analyst with research firm The Linley Group, said that IDT is better diversified than either of these companies and that it gets significant revenue from the enterprise market. "IDT's co-processor shipments are largely dependent on Cisco Catalyst 6000 shipments," he added. "This one design win has moved IDT into the top slot in search engines (TCAMs) with more than 1 million units shipped."

Although IDT has suffered from many of the issues facing physical layer (PHY) companies like AMCC and Vitesse, these companies have nearly 100 percent of their businesses in communications ASSPs. So they have been more seriously hit by the current telecom malaise. "Though IDT has been affected in its communications business, due to having some general-purpose products such as logic, the firm has not been hit quite as hard," said Greg Lang, president and CEO-elect of IDT.

Wheeler said that IDT is well positioned to weather the storm. "The company is not highly dependent on new design wins for future revenues, so the lack of new design starts is not a major factor," he said. "IDT also has plenty of cash to sustain its current cash burn rate for some time."

IDT has made a crucial investment in mainland China through its acquisition of Newave, a design house aiming for telecom products in the local market. As a result, says Jack Lin, director of IDT's Asia-Pacific operations, IDT was able to accelerate telecom product development by as much as two years. "IDT-Newave is currently offering products in switching, voice processing and transport areas while future products are planned in the area of protocol control," Lin added.

ZTE Corp., China's largest listed telecom equipment manufacturer, has selected IDT products, including its family of voice-codec devices, to address a variety of applications in subscriber-line cards in access networks, CO switches and VoIP gateways.

Moreover, Newave's China-designed octal E1 line interface unit (LIU), 2Kx2K time slot interchange (TSI) switch and quad codec have been chosen for several next-generation access and optical transport applications by Alcatel Shanghai Bell, mainland's leading telecom infrastructure and solutions provider.

SRAM question

Keep it or leave it: the SRAM question has intrigued this communications bellwether for quite some time. There were some leads from the Silicon Valley rumor mill that IDT is going to abandon the SRAM business. Lang said that IDT is not planning to get out of the SRAM business, but instead, it will continue to develop and sell SRAM products. "SRAMs help IDT provide an important component of the overall communications solution, balance IDT's manufacturing capacity and serve as a driver for process technology enhancements."

Linley Group's Wheeler agrees that most of IDT's SRAM shipments are into communications systems, so this is complementary in terms of customer access. "The company is very focused on comms and has been steadily reducing its exposure to the commodity SRAM business," he said.

For IDT, SRAMs have traditionally been one of the popular products in Asia. Moreover, said Lang, IDT's core competency in SRAM technology has enabled the company to develop leading communications-specific products such as its IP co-processor devices.

However, the comms silicon maker continues to evaluate its roadmap to ensure that it is well positioned to meet the emerging needs of the semiconductors market. IDT has recently released updated versions of RC-32334 and RC-32332 integrated communications processors, as well as a new 128Kx72 full-ternary IP coprocessor, capable of faster and wider search performance. "And we are partnering with embedded software vendors like WindRiver and Jungo to provide more complete solutions," said Lang.

Calling comms its religion, IDT narrowly missed the telecom boom ignited by the Internet dog years. If it stays tuned, it might catch up with the next one.

- Majeed Ahmad

EE Times Asia

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