NEW YORK-With the personal computer sector maturing, CIBC World Markets views “communications applications as the next driver of the semiconductor industry,” notwithstanding the current but temporary slowdown, said N. Quinn Bolton, semiconductor equipment analyst for the investment bank.
“There is a tremendous drive in communications ICs (integrated circuits) as intelligence moves to the edge of networks and the Ethernet penetrates the access space,” added Bolton, who moderated a panel CIBC convened May 15 on “Developments in Communications Silicon.”
In addition to evolving network convergence “extending the Ethernet’s life inside the network,” George A. Hervey, chief financial officer of Marvell Technology Group. Ltd., Sunnyvale, Calif., said his company also is “very interested in wireless technology, which is absolutely a trend as 802.11b appears to be gaining significant momentum.”
As companies outsource their information technology functions and rely increasingly on mobile workers, the longstanding rule that 80 percent of network traffic remains inside enterprises is rapidly being broken, said Daryn Lau, president and chief executive officer of ZettaCom Inc., San Jose, Calif.
“This is having a profound influence on the Internet because these applications are not being rewritten (for mobility and remote access), so the edge of networks must become more intelligent and more service-aware. That requires the support of core processors,” he said.
The practical effect of this trend toward more intelligence in the networks is that semiconductors will be called upon to deliver “more and more processing of more data packets at greater speeds to generate more revenues for carriers,” said Kenneth Schultz, president and CEO of SiberCore Technologies, Kanata, Ontario. “There will be rich, multi-layered packet processing performing some of the highest demand hardware functions.”
Like Shultz, Alan F. Krock, chief financial officer of Integrated Device Technology Inc., Santa Clara, Calif., sees integrated processors handling distributed logic functions as intelligence moves outward toward the edge of communications networks.
Krock said he also believes there is a significant role for semiconductors in providing the “mixed signal expertise associated with getting voice into IP (Internet Protocol) and into the network edge.”
Bandwidth bottlenecks caused by proprietary technology used to link buses in large communications systems will give way to open systems reliant on semiconductors, said Adam Chowaniec, president and CEO of Tundra Semiconductor Corp., Kanata, Ontario. A bus is an electrical connection that allows two wires or lines to be connected together.
While Chowaniec’s vision is one of semiconductors providing a more open link among network elements, Lau of ZettaCom offered a different opinion.
“The biggest problem in communications semiconductors is integration. It is like the PC industry was 15 or 20 years ago. If we want to drive outsourcing to OEMs (original equipment manufacturers), we need to partner to ensure interoperability and seamless integration,” he said.
Chowaniec countered that increasing levels of standardization and rising time-to-market pressures will accelerate the trend toward outsourced semiconductor manufacture.
“We need to place more emphasis on quality of service. There is a myth out there that over-provisioning of bandwidth will solve the problem. That is prohibitively expensive, and it can’t control latency and jitters (in data transmission),” Marvell’s Hervey said.
Semiconductors also will play a growing role in optical networking and in linking optical and electrical network components, industry executives said.
Santanu Das, president and CEO of TransSwitch Corp., Shelton, Conn., said he believes the day is not far away when “cost-effective optical switching technology can be deployed in metro and access networks.”
For Daniel Trepanier, president and CEO of Quake Technologies Inc., Ottawa, Ontario, an important disruptive technology in the offing exists in the “opportunities for a high level of integration of optical and electronic devices in very small spaces.”
