Maxwell - Not a Pretty Picture for AMD's LAN business. AMD is trying to buy it's way out of trouble.
"Described by one analyst as a "disaster," AMD's communications efforts have fared poorly of late. The company's communications group, which sells xDSL, wireless, and line-card chipsets in addition to Ethernet devices, reported 1997 revenue of $707 million, but is expected to post sales of only $525 million this year, said Richard Faust, an analyst at Kaufman Brothers L.P., New York."
Looks like Jerry has taken his eye off the ball - and damaged a good business unit while seeking his ego redemption on Intel.
That means AMD will have to sell EVEN MORE K6's to make up for this loss.
Guess what company already has the integrated LAN/PHY IC?
Yep, you are right - none other than Intel!
Here's the whole article below.
Paul
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techweb.com
August 10, 1998, Issue: 1121
Section: News
AMD buys rights to Adhoc's PHY IC technology
Mark LaPedus
Silicon Valley -- In a move that could help resurrect its flagging communications-chip businesses, Advanced Micro Devices Inc. has made an equity investment in Ethernet IC start-up Adhoc Technologies Inc., according to sources close to the deal.
Under the terms of the agreement, AMD will design a family of LAN chips for
the Fast Ethernet market based on Adhoc's proprietary low-voltage
physical-layer (PHY) IC technology. Later this year, AMD will roll out a line of
stand-alone PHY chips using Adhoc's technology, sources said. Neither
company would comment on the deal.
Described by one analyst as a "disaster," AMD's communications efforts have
fared poorly of late. The company's communications group, which sells xDSL,
wireless, and line-card chipsets in addition to Ethernet devices, reported 1997
revenue of $707 million, but is expected to post sales of only $525 million this
year, said Richard Faust, an analyst at Kaufman Brothers L.P., New York.
According to observers, the Sunnyvale, Calif., company is scrambling to obtain
more Ethernet chip technology-and with good reason. AMD and its processor
rival, Intel Corp., are in a race to develop new, lower-cost Ethernet chips for PC
motherboards, which could cut system costs by eliminating the need for a
traditional LAN card.
Intel has already shown signs that it is heading in this direction and, in a distressing sign for LAN chip makers, could offer even higher levels of integration with its powerful Ethernet chip technology. "I think a company like
Intel could easily integrate all of the LAN functions into its own chipsets," Faust said. "I don't think you'll see Intel do this in the short term, but it could happen one or two years down the road."
Intel, one of the world's largest LAN chip makers, already sells a line of discrete Fast Ethernet and 1-Gbit chips-highly integrated products with a media-access controller (MAC) and PHY IC built in. Intel also uses these devices in its own LAN card lines.
AMD, by contrast, is considered a significant LAN chip maker, but does not sell
LAN cards or other networking equipment. It does have a broad line of
10/100-Mbit/s MACs, but the company so far has been unable to develop its
own PHY IC devices.
By integrating Adhoc's PHY IC technology, AMD could gain a more equitable
footing in the market and keep pace with Intel's Ethernet integration path,
sources said. The PHY IC, also called a transceiver, is a vital networking
component that helps send and receive electrical signals over a network.
San Jose-based Adhoc, a year-old start-up founded by executives from Quality
Semiconductor Inc., came out of nowhere to introduce its first product: a line of
3.3-V, single-port PHY ICs for 10/100-Mbit/s LAN networks. Next month,
Adhoc will ship a 3.3-V, quad-port version of the chip, and eventually hopes to
bring out low-voltage 1-Gbit Ethernet and repeater chips.
In a separate deal, NEC Corp. has licensed Adhoc's PHY IC technology, but
the Japanese company will not take an equity stake in the start-up, sources
close to the companies said.
To date, only a few companies- mostly smaller and fabless-have the
mixed-signal design expertise to develop CMOS-based 3.3- and 5-V PHY ICs
for Fast Ethernet and 1-Gbit networks. Hewlett-Packard Co. and others make
PHY ICs for use in 1-Gbit networks, but must rely on GaAs or BiCMOS
technologies.
Copyright r 1998 CMP Media Inc. |
