Electonic Buyer's News
December 14, 1998, Issue: 1139
Section: Communications
A growing Vitesse acquires VTEK
Mark LaPedus
Silicon Valley -- Amid explosive growth in its communications IC business, Vitesse Semiconductor Corp. hopes to expand into and conquer new markets with the recent acquisition of Vermont Scientific Technologies Inc. (VTEK), Bridgewater Corners, Vt.
VTEK-a small, fabless IC-design house with 18 employees-specializes in the development of high-end chip products for several telecommunications and related markets, including ATM, frame relay, xDSL (Digital Subscriber Line), SONET, TCP/IP, and RISC processors.
Initially, Vitesse will leverage VTEK's technology to broaden its own SONET chip efforts. "The acquisition of VTEK adds considerable value to our existing design expertise, particularly in the SONET overhead-processing area," said Robert Nunn, vice president and general manager of Vitesse's Telecommunications Division.
Vitesse--a gallium arsenide (GaAs) chip specialist based in Camarillo, Calif.--will roll out the first of a new family of overhead-processor products based on VTEK's technology by mid-1999. The products will address 2.5-Gbit/s-bandwidth (OC-48) applications, Nunn said.
With VTEK's technology, Vitesse is looking at a variety of chip markets, including xDSL. But, while the company did not elaborate on its future in xDSL, it has recently expanded into other areas.
Last week, for example, Vitesse introduced its Cross-Stream chip-set for use in high-bandwidth data-communications switch applications, such as Gigabit Ethernet, ATM, and Fibre Channel.
The Cross-Stream chipset, which allows OEMs to use fewer but faster chips in synchronous serial-backplane applications, consists of two devices: the VSC870, a 2-Gbit/s synchronous serial transceiver; and the VSC880, a 2-Gbit/s serial-switch fabric IC. The VSC870 and VSC880 cost $69 and $250, respectively, in 1,000s. Both products will begin sampling in the first quarter of next year.
Vitesse has had a big year in other ways as well.
In addition to opening the world's first 6-in. GaAs wafer-processing fab, in Colorado Springs, Colo., the company recently reported sales of $175.1 million for fiscal 1998, ended Sept. 30--a 67% increase over fiscal 1997. Net income for 1998 was $52.9 million, compared with $32.9 million the previous year.
Vitesse is also bullish about 1999. "I've heard the downturn in the semiconductor market has finally bottomed out, but Vitesse is still going strong," Nunn said. "We believe we can grow 50% this year [in revenue]. We feel we can sustain that kind of growth beyond 1999.
"We're still seeing strong growth on the telecom side," Nunn added. "There's also a lot going on the data communications side of the business."
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