Now There Are 4 DSL Chipmakers
Written by Dave Burstein   

ikanos_logoThe merged Ikanos/Conexant will face off against Infineon, Broadcom and Trendchip for DSL leadership. None seems to have a major advantage in product quality. Broadcom_StrataXGS_colorfulCentillium and others have modest sales and no announced new products. The DSL chip market will continue at $hundreds of millions for many years, but will not grow. Because carriers are reluctant to switch DSLAM and chip vendors, it will be very hard for a new entrant to find a place.  At least one development is underway by a company in "stealth mode," which hopes to leapfrog the incumbents with a fully vectorized DSM/DSL set of chips.

infineon_smEach merger reduces the competition and potentially allows all the companies better margins. Prices have "firmed" a bit since Infineon bought out Texas Instruments, and eliminating a competitor should continue that trend. Less likely I believe,  Broadcom could decide to price very low to squeeze another semi house out of the business. Ikanos/Conexant will be heavily dependent on VDSL sales to AT&T U-Verse and those like Bell Canada that follow AT&T's lead. Alcatel and Conexant didn't come close to meeting AT&T's expectations early on so the relationship was always tense.  Competitors constantly spread rumors they would take away the account, which AT&T exploited to drive down prices, but they'll held the lead in that account.trendchip

Ikanos has been selling VDSL to Alcatel, Motorola, Sagem, NEC and Sumitomo for FT, KT, NTT, Swisscom, and others.  Conexant also sells to Alcatel (Easily $100M total for AT&T U-Verse,) as well as Motorola, Netgear, 2Wire, Huawei, Xavi, Cisco and ZTE. Those chips go to China Telecom, China Unicom, Bell Canada,  and many others, with $159M in DSL chip sales in 2008. Ikanos spoke of shipments for Chunghwa in Taiwan, which had been considered a Broadcom account.

Infineon is strong at Deutsche Telekom and in China. Broadcom has an enormous line of compatible chips. Trendchip is almost invisible in the West, but has taken a very strong position in the Chinese marketplace.