The Linley Wire Independent Analysis of the Networking-Silicon Industry Volume 6, Issue 6 April 6, 2006

Editor: Linley Gwennap
Contributors: Bob Wheeler, Jag Bolaria, Joseph Byrne

• PMC-Sierra Acquires Passave
• NetXen Enters 10GbE NIC Market
• New Report: A Guide to High-Speed Interconnects

This week PMC-Sierra announced an agreement to acquire Passave for approximately $300 million, which will be paid through the issuance of PMC-Sierra stock. PMC expects to close this acquisition in April 2006. In addition to Passave's product line and revenue stream, PMC will transfer Passave's 150 employees located in Israel and California. In a recent S-1 filing for an IPO, Passave declared 2005 revenue of $43 million.

Founded in 2001, Passave is one of the major success stories among silicon startups. It parlayed an initial $10 million investment into a revenue run rate of more than $10 million per quarter in less than five years. Passave was the first vendor to ship EPON silicon for ONT/ONU and OLT applications. The company developed separate silicon for ONT/ONU deployments at the customer premises and for OLT deployments at the central office. Both chips provide QoS features and filtering on Layer 2 and Layer 3 parameters.

By being the first vendor to production with a complete EPON chip set, Passave won business in several countries and with several carriers. The largest of these wins was with NTT in Japan. Passave has shipped more than 2 million ONUs into NTT's FTTH broadband service through customers such as Mitsubishi and Sumitomo. Passave's devices include NTT-specific requirements, which make it difficult for competitors to displace them. Passave's products also offer better performance and lower BOM cost than chips from leading competitor Teknovus. As a result, revenue from Passave's chips should continue to increase in 2006.

For PMC, this acquisition increases its revenue by more than 10% and gets the company into a segment where it had little presence. Although, PMC was a strong player in ATM DSLAMs, it had fallen behind in the transition to IP DSLAMs. With Passave, PMC can use the developing PON market to rebuild its presence in broadband access equipment. For CPE, PMC can bundle its MSP VoIP-gateway processors with PON chips from Passave. —Jag

Complete coverage of Passave's products appears in our report A Guide to Next-Generation Broadband Interface Chips.

NetXen Enters 10GbE NIC Market

Late last month, NetXen emerged from stealth mode by announcing production availability of its first products. Adding punch to the launch, leading server OEMs HP and IBM were announced as NetXen customers. NetXen's NX2035 is a single-chip 10GbE controller for PCI Express (PCIe). In addition to its chip, NetXen announced three board-level (NIC) products.

The NX2035 integrates dual 10GbE MACs with XAUI for redundancy, four GbE ports, and a PCIe x8 interface. The chip includes a DDR SDRAM interface for buffering packets and an optional QDR SRAM interface. But the NX2035 is not a simple fixed-function 10GbE controller. The chip is built around four custom processing engines and a crossbar that connects the chip's major blocks. NetXen is using this internal programmability to deliver advanced protocol offloads such as support for TCP Chimney, RDMA, and iSCSI. NetXen's board-level products include single-port 10GbE cards for CX4 and fiber (XFP) as well as a 4xGbE NIC.

Unlike its NIC competitors, NetXen skipped PCI-X altogether in favor of PCIe. In doing so, it leapfrogged products from 10GbE NIC leaders Neterion and Intel. Neterion offers a PCIe NIC, but that product requires a separate chip to bridge the PCIe interface to the company's PCI-X controller chip. Intel offers only PCI-X 1.0 NICs for 10GbE. NetXen's single-chip solution with redundant XAUI ports makes it particularly attractive for blade-server designs such as IBM's BladeCenter H.

Although the 10GbE NIC market has been slow to develop, increasing competition is driving prices down quickly. Adapters for CX4 (or without an optical module) are now selling for $600 to $1,000 in volume. On the switch side, multiple vendors now offer integrated 10GbE switch chips. In 2007, short-reach 10GBase-T products should emerge as an alternative to CX4 and fiber for datacenter applications. Against this backdrop, NetXen's market entry appears well timed. —Bob

Additional coverage of10GbE NIC products appears in our report A Guide to Gigabit and 10G Ethernet Silicon.

New Report: A Guide to High-Speed Interconnects

A Guide to High-Speed Interconnects has been extensively revised to incorporate new announcements made since the release of the previous edition. Increasing bandwidth and the unique requirements of data centers, networking, computing, and storage are driving a host of interconnect technologies. With these diverse requirements and competing stake holders, interconnects are likely to be specialized for the target applications. At the same time, several of these interconnects will lose out or become niche solutions.

The report examines the leading high-speed interconnect technologies and provides an unbiased analysis of their strengths, future potential, and projected market. In addition, within each interconnect, we examine the key vendors offering silicon products as well as the intellectual property to enable silicon. We share our picks for future winners in each interconnect segment.

The report covers 10Gbps PHYs for optical interconnects, 10Gbps PHYs for copper interconnects, backplane transceivers, and chip-to-chip interconnects that include PCI Express, RapidIO and HyperTransport. We look at the standards for these interconnects as well as the applications driving changes to the standards. Some of these changes will introduce a disconnect and could present opportunities for new leaders to emerge in the affected interconnects. These changes include Electronic Dispersion compensation, resource virtualization, congestion management, and use of lower cost wiring.

Coverage of 10Gbps serdes vendors includes Aeluros, Broadcom, Marvell, Quake, Vitesse, ClariPhy, Scintera, Phyworks, and others. Copper transceiver vendors include Altera, Broadcom, Lattice, Marvell, Mindspeed, Transwitch, National, PMC-Sierra, SolarFlare, Texas Instruments, Vitesse, Xilinx, and more. We also cover proprietary 10Gbps interconnects for copper from vendors such as Vativ and KeyEye. We include coverage of high-speed bridge and switch chips from PLX Technology, Tundra, IDT, Mercury, PMC-Sierra, NEC, Intel, Pericom, and others. Because many of these vendors use third party IP to develop their products, we cover the leading IP vendors such as Rambus, PLDA, ARM, and Synopsys.

A Guide to High-Speed Interconnects examines in detail the performance, feature sets, and architecture of each covered product, highlighting strengths and weaknesses in a consistent, easy-to-compare fashion. We examine competing specifications and the vendor activity behind each technology.

Order by April 30 to take advantage of a special prepublication discount. For more information on this report, visit our web site.

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