Retooled LSI seeks No. 2 position
Mar. 31, 2000 (Electronic Buyers News - CMP via COMTEX) -- Phoenix- Having
recast itself as a communications company, LSI Logic Corp. is now aiming to be
the second-largest supplier of merchant communication chips by 2002, behind
Lucent Technologies Inc.'s Microelectronics Group.
The company plans to achieve that ambitious goal by using its manufacturing
muscle and intellectual-property-integration capability to displace entrenched
competitors such as Broadcom Corp. and Intel Corp.
According to executives speaking at LSI Logic's recent Connections 2000
conference here, it's a goal well within the company's grasp.
Analysts, however, believe LSI Logic has a ways to go. "It's going to be
difficult for them," said analyst Kim Funasaki of IDC in Mountain View, Calif.
"They are a pretty big player in ASICs and SOCs for communications, but the
market is moving away from ASICs to more of an ASSP model."
But that is not stopping LSI. The company's ASICs are already ingrained in many
of the markets Broadcom and Intel are targeting, such as third-generation (3G)
cellular, wireless data, and Ethernet-based networks.
Meanwhile, the parade of start-ups also attacking these markets doesn't have
much to offer in the way of system support, manufacturing infrastructure, or the
all-important customer confidence, said John Daane, executive vice president of
LSI's communications products group in Milpitas, Calif.
"People aren't looking for new vendors, they're looking to maximize the
relationships they've got," Daane said. "At any major player in the
communications industry, LSI is already a qualified preferred vendor."
That's not to say that OEMs won't switch suppliers if they're not getting what
they need. In fact, LSI's plan for supremacy assumes they will. For example, LSI
had no network-switching business with Nortel Networks last year. This year, all
of Nortel's systems are using LSI silicon, Daane said.
The company has also begun to convert 3Com Corp. designs. "As we steal business
from Intel and Broadcom, it will only further increase our dominance in this
area," he said.
LSI's recent announcement of an intelligent Ethernet switch illustrates its plan
to grab market share. The device integrates 24 10/100-Mbit/s Ethernet ports, two
Gigabit Ethernet uplinks, an ARM processor, and all the memory and control
logic.
"We've not only incorporated all the major components of the device, but also
simplified all the external logic," Daane said. "Now, you can have one chip with
a MAC-layer processor, buy external PHYs from LSI, go out and buy the memory
devices, and have the most integrated switch on the market."
LSI is co-developing products based on the intelligent switch with the top five
switch vendors, with product announcements anticipated in a few months, he said.
"That just goes to show that reuse of IP accelerates time-to-market and allows
OEMs to compete on cost," Daane said. LSI plans to unveil the intelligent switch
at the Networld+Interop trade show in May.
In the Ethernet-PHY arena-where analysts say LSI's recent acquisition of Seeq
Technology has turned lead into gold-the company is looking toward further
integration in the MAC layer. LSI is designing a core for its 0.18-micron G12
process, which is also being enhanced for the company's upcoming Gflx
0.13-micron technology.
"We're finally getting down into a power area where we can integrate more than
eight ports," said Jordan Plofsky, vice president and general manager of LSI's
networking division.
"We also see a lot of possibilities for integration of single, dual, and quad
ports in areas like DSL, voice-over-IP, printers, and print servers."
"In G12, it's a very powerful combination, having a PHY and a bunch of logic to
do that," he said.
LSI is developing an Ethernet serializer/deserializer PHY for introduction this
summer, using embedded FPGAs to allow for pre-standard flexibility, Plofsky
said.
In wireless, LSI is leveraging its ZSP DSP engine to become a leader in silicon
for 3G cellular communications. While the company's first 3G product, expected
to be released this year, is based on the OakDSP core from DSP Group Inc., a
product in development for a 2001 release is based around a ZSP core that has
been optimized for high performance and low power consumption, said Danny Biran,
vice president and general manager of LSI's wireless-products division.
Expanding its business into wireless-data networks, LSI recently won a ZSP-based
design-displacing Texas Instruments Inc. in this case-at a "big telecom company
in Scandinavia," Biran said.
LSI believes it is also in good position to dominate the CDMA field, despite the
fact that the incumbent market leader-Qualcomm Inc.-owns the intellectual
property.
Qualcomm's limited licensing strategy will go a long way toward enabling LSI to
assert its position in the market, according to Daane. Besides LSI, only Intel,
Philips Semiconductors, and PrairieComm Inc. hold rights to key CDMA patents.
Of those, only Qualcomm and LSI are shipping silicon.
ebnonline.com
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By: Crista Souza
Copyright 2000 CMP Media Inc.
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