eetimes.com
PC unit will take back seat at Conexant
By Loring Wirbel
EE Times
(01/13/99, 11:51 a.m. EDT)
NEWPORT BEACH, Calif. ¡X Conexant Systems Inc., the newest kid on
the communications block, is setting off in a radically different direction from
that of former parent Rockwell International Corp. Although the personal
computing operation still brings in the largest revenue of the company's five
divisions, Dwight Decker, chief executive at Conexant, said the shrinking
margins in all PC-oriented products means that client-side analog and digital
modems will get less investment than was traditional at Rockwell.
The two divisions of the $1.2 billion "startup" slated to get the lion's share of
investment in 1999 ¡X wireless communications and network access ¡X
represent the fields with the largest compound growth rate and the highest
margins, respectively. And Conexant's gallium-arsenide fab in Newbury
Park, Calif., will play a key role in both groups' fortunes.
Decker said that moving the company's full GSM digital cellular chip-set
solution into volume production will be Conexant's highest wireless priority.
Next on the list is an effort to move CDMA and upbanded GSM products
from power amps into full chip sets covering baseband to antenna functions.
Conexant will leverage the GaAs RF work done in power amplifiers and
low-noise amps to enhance its development work in silicon IF and baseband
functions.
In the network access division, current T1/T3 and Asynchronous Transfer
Mode products are enjoying high margins. But Conexant sees its top
development priority as broadening the GaAs work in OC-48 (2.5-Gbit) and
OC-192 (10-Gbit) Sonet physical-layer products, including transimpedance
amps, clock and data-recovery chips, laser drivers and mux-demux parts.
"Newbury Park will generate more than $100 million in revenue in the
course of 1999," Decker said. "That makes our GaAs facility bigger than
Anadigics', bigger than TriQuint's and about in line with Vitesse."
The other goal within the network access division will be enhancing the
remote-access concentrator products with voice-over Internet Protocol
(VoIP) support, adding voice compression and packetization functions
directly into the concentrator chip.
VoIP also plays a role in another Conexant division, digital "infotainment." A
Docsis-compatible two-way cable-modem chip set will roll out in 1999, and
then be enhanced with adjunct products. One device will be a single-chip
quadrature-amplitude modulator and media-access controller. Also in the
chute are a single-chip RF tuner and a VoIP voice codec, allowing
cable-modem manufacturers to quickly support IP telephony over cable
networks.
Decker also sees important growth in the personal imaging division, where
Conexant will offer CMOS imagers and the first dedicated chip set for color
ink-jet printers.
That leaves the PC operation, a group Conexant can't ignore, but in which
margins will likely remain depressed for some time to come. Decker said
that Conexant must be involved in markets such as standalone G.lite ADSL
modems, combination V.90/G.lite modems and devices that support G.lite,
V.90 and the Home Phoneline Networking Alliance controller in a single
chip. The company also must continue to drive software-based modem chip
sets using host Pentium control, which already amount to 10 percent of
analog modem volumes shipped. But the business won't be much fun.
"We're telling the institutional investors that G.lite is not going to be a winner
from a revenue perspective in the near term," Decker said. "We believe in
ADSL, but it's going to take the phone companies a while to deploy it. The
same can be said of cable modems, but the important point is that the closer
products get to the PC, the worse the margins become."
Indeed, said Decker, "We're anticipating poor margins in all PC-related
businesses for the foreseeable future." |
