DSL Prime News: The Inside Source

A close look at what news is real in the DSL industry—and what isn't.

by Dave Burstein DSL Prime [January 30, 2004]

Wonderful news for the DSL industry. China Netcom just ordered 2.5 million lines, including 1.2 million from Huawei. Deutsche Telecom set a 10 million subscriber goal for 2007. Illiad/Free in France is launching an IPO. The UK will have broadband almost everywhere in 2005, and Timms is setting 2010 for fiber/VDSL as the next goal. Infineon is investing $100 million for ADSL modem chips. Chipmakers are sold out, although that may be brief.

Verizon is now following the lead of Europe and Bell Canada, adding 7 million servable lines in 2004, for around 90 percent coverage. The "Broadband to Every Customer" is a future goal, as is the 50-100 Mbps Ivan Seidenberg also pointed to.

Bring that spirit of celebration to Fast Net Futures in March, and not just to the conference party with alt-rock temptress Liz Phair. The people coming are exceptional. "DSL Day" on Monday will have senior people from nearly every chipmaker and equipment supplier. CTO Niel Ransom of Alcatel opens Tuesday. Stars throughout the day, from Odlyzko, who was the first to see through the bubble, to the finest from Wall Street. John Cioffi of Stanford will advance the path to 100 Mbps on DSL, while Jeff Tudor and John Pickens will describe the same on the cable side. CTO Jim Sackman of AFC, supplying Verizon's fiber, will open Wednesday, with Paul Morris (Utopia fiber project), Greg Thompson (Cisco's video CTO), CTO Kevin Schneider of Adtran, Bernard Deutsch of Corning and their peers throughout the day. The best in our business will be there.

Korea Down
12,000 subscribers dropped broadband in December, after a flat November and a 167,000 fall in October. KT has been warning since last summer orders are down, no surprise as over 70 percent of Korean homes have DSL or cable. Hanaro lost 146,000 subscribers in 2003, many moving to KT's VDSL.

KT has accepted that broadband can no longer replace lost telephone revenues and taken major layoffs. They've developed sophisticated plans for "ubiquitous" services that go beyond NTT Docomo and far beyond the strategic thinking of U.S. carriers. The VDSL conversion is well under way—over a million homes, soon to double. That's resulted in Metalink sales up 30 percent, and ST proudly announcing DMT volume availability. Japan is the next big prize, where they will soon be advertising 50 and even 100 Mbps DSL service.

Chip sales hot
Extraordinary growth in China and strong results almost everywhere else is producing demand higher than chipmakers estimated. Until very recently, that just meant a request from the foundry to run some extra wafers, but suddenly the foundries are almost sold out.

Confirmation of the strong sales comes from Pasquale Pistorio's statement "ST made greater use of outsourcing to accommodate a late quarter spurt in orders." Conexent, merging with Globespan, also reported "Record Shipments of ADSL, Satellite Set-top Box and PC Video." Extreme caution urged before assuming the shortage will last; once the story has been reported and rumors are out, many companies simultaneously load inventory. With ADSL2 interoperability close, vanilla ADSL will be a drag on the market in a few months.

Infineon: $100 million for "first rank of ADSL CPE"
Buying ADMtek for gateways and wireless
Christian Wolff e-mails from Taiwan, "Infineon intends to join the first rank of ADSL CPE chip makers." They have been talking investment with ADMtek/Accton for months, but decided instead to buy the whole company. ADMtek currently produces price leading 802.11b chips and a full gateway system on chip in a 0.18 micron process by Chartered Semiconductor. Core partner MIPS reports the ADMtek chip has a 50 percent market share in Taiwan, and parent company Accton has promised substantial purchases.

Infineon has dominated the VDSL market, although Metalink is now winning some key contracts, Ikanos is shipping DMT in volume, and ST says they are ready with production chips. Several are working on the VDSL2 standard, on a fast track at T1E1.4. G.shdsl has been disappointing for everyone. Infineon's CO chips have always been handicapped by not having a CPE partner, which this deal will solve.

ADMtek describes their current ADM5120 as "a high performance, highly integrated, and highly flexible SOC (System-On-Chip) that facilitates the functionalities of SOHO/SME Gateway, NAT Router, Print Server, WLAN Access Point, and VPN Gateway. ADM5120 enables the sharing of IP-based broadband services throughout the home/office using wired/wireless computers, entertainment equipment, printers, and other intelligent devices. Internally, the ADM5120 ASIC consists of a high performance (227 MIPS) embedded MIPS CPU, an embedded switch engine, 10/100M PHY, an embedded PCI bridge, an embedded USB host, and interfaces for UART, SDRAM and FlashVPN engines."

Copyright 2004 Dave Burstein.
The DSL Prime Newsletter is reprinted with permission.

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