Abstract
The opportunities created by rising broadband penetration rates and the gradual coalescence of home networking have beguiled droves of network equipment and component players. At the same time, encouraged to diversify due to the slowdown in the global switch market, numerous Taiwanese IC design houses, including ADMtek, ASIX, IC Plus, Realtek, have been aggressively rolling out integrated controller for home networking equipment, particularly for home gateway.
In the past Taiwanese chipmakers collectively possessed a great deal of single-chip home gateway controller market share, while Taiwanese equipment makers have been the major producers of home gateway. However, as the functional integration and applications of home gateway become ever more broad, chipmakers face rising technological, cost, and time-to-market challenges. In light of the limited product lines and R&D resources of Taiwanese IC design houses, continually rolling out new chips to keep pace with product evolutions presents a key hurdle to Taiwanese chipmakers’ long-term competitiveness.
Taiwanese IC design houses already stand on a solid foundation in Ethernet MAC/PHY chips, and most chipmakers have chosen to penetrate the home gateway chip market by obtaining network processor IP licensure and supplying value-line home gateway solutions. As such a solution dovetails well with equipment maker and end-user demand, router-on-a-chip sales have been strong between 2002 and the first half of 2003. Market demand for home gateway is expected to rapidly transition from wired to wireless home gateway. Given that Taiwanese chipmakers already have strong WLAN 802.11b design capabilities, designing an SOC (System-on-a-Chip) with integrated WLAN MAC is not likely to be especially difficult. However, Taiwanese chipmakers do face certain obstacles over the long term under the growing integration requirements of home gateway chips.
Although at present Taiwanese chipmakers are skilled with Ethernet MAC/PHY, they lack processor and broadband chip technology. Once integration of broadband modems and SOHO routers gets under weigh, demand for home gateway, which has built-in broadband communications capabilities, will surface. Additionally, high performance network processors are key to determining the success with which home gateway can process various communications protocols. These two key components boast higher technological thresholds, and Taiwanese chipmakers do not currently have a grip on the necessary technologies. Even if Taiwanese players can secure processor technology through IP licensure, such hard core IP does not allow for desired cost levels; additionally, a great deal of resources must be spent on perfecting design, which further impacts time-to-market.
In contrast, as 10/100M MAC/PHY integrated chip technology matures, network processor and broadband chipmakers will find integrating such IP much easier. In addition to Taiwanese IC design houses, Broadcom, Conexant, and Marvell are also competing in the value-line home gateway chip market. These international players have more fleshed out WLAN, HomePNA, xDSL, and cable modem product lines than Taiwanese chipmakers, which will facilitate integration of home gateway chips, while at the same time shortening time-to-market.
If Taiwanese chipmakers wish to continue developing from a stable base built on home gateway chips, they will need to forge strategic alliances and aggressively seek out technological collaboration to boost broadband, home network, and network processor technologies. Taiwanese players will also need to extend into high-end home gateway, or wrench down time-to-market to compete on value-line home gateway chips.