PMC-Sierra chief sees ATM shakeout

Electronic News, March 14, 1994 by Jim Detar

BURNABY, BRITISH COLUMBIA--A shakeout looms in the network chip market even as the Asynchronous Transfer Mode (ATM) protocol gains acceptance. So says Robert L. Bailey, president and CEO of PMC-Seirra, which has a toe-hold in the ATM market through the Saturn (SONET/SDH ATM User Network) development group.

As more semiconductor companies enter the ATM chip market, the cost of chips will be driven down, Mr. Bailey said, adding ATM will be on a cost-par with Fast Ethernet at the node level by 1995. He said ATM growth will be driven by demand for emerging wideband applications, including videoconferencing, transmission of medical images and interactive multimedia.

"There are 10 companies doing ATM silicon today," Mr. Bailey aid. "A year from now, there will be 20 companies dowing it. And two years from now, there will be three companies left. Most of the companies jumping into this market don't understand what they are getting into."

Semiconductor companies are rushing to provide ATM ICs for network hubs, routers, bridges and nodes; in recent weeks, VLSI Technology, Texas Instruments, TranSwitch, Integrated Telecom Technology (IgT), NEC and others have announced new devices supporting ATM at some level. Other companies, such as LSI Logic, began laying the groundwork for a move into ATM last year (EN, Aug. 2, 1993).

Still, some industry observers have noted new startups targeting ATM have been few in number, despite the anticipated growth of the market. According to some, the window may have already closed. "The people who are going to survive are clearly identified," said one industry observer. "The silicon has been positioned, and it's too late to do anything except writing software and getting the network management tools together."

PMC-Sierra was formed in June, 1992, which staff from the Pacific Microelectronics Centre Division of MPR Tel-tech Ltd. and with funding from Sierra Semicondu"tor and Bass & Associates, both of San Jose, Calif. The company is 65 percent-owned by Sierra Semiconductor. With a strong footing in ATM through the Saturn group, PMC Sierra is planning to roll out more devices in upcoming months.

Among the products PMC-Sierra is counting on is the Stel/ar family and the SUNI-155 (Saturn User Network Interface) chip, a currently available 155Mbps device. Next will be a device providing the physical layer interface for 622Mbps operation (EN, Aug. 30, 1993).

Mr. Bailey said the SUNI-622 will not be introduced, however, until the second half of this year. PMC-Sierra is hoping its SUNI chips will be the glue that ties the millions of PCs and workstations around the globe to the emerging ATM "information superhighway."

PMC-Sierra also plans to roll out a low-cost ATM Saturn User Network Interface for 52Mbps and 155Mbps in 2Q94; an enh nced version of the 155Mbps SUNI in 4Q94; and an ATM Saturn User Network Interface for DS-3 and E-3 in 2Q94.

PMC-Sierra is positioning itself to lead the ch rge toward long-awaited ATM to the desktop. At the physical interface level, where the node is connected to the ATM network, PMC-Sierra now has 80 percent of the installed sockets, according to Mr. Bailey.

PMC-Sierra achieved the $1 million a month revenue mark in August, 1993. "We will probably g row at a rate of 150 percent next year," said Mr. Bailey, who left a position as VP and GM of the AT&T Microperipheral and Network Computing Products Division.

The Saturn Group has grown from a dozen companies last summer (EN, June 22, 1993) to more than 100 equipment vendors working to define and develop interoperable, standards-compliant chipsets for ATM-based LAN and WAN applictions. Also intrinsic to the efforts are interoperability with the Synchronous Optical Network (SONET) North American standard for fiber-optic transmission and the Synchronous Digital Heirarchy (SDH) standard for fiber-optic transmission (primarily used in Europe).

The Saturn group includes SynOptics, Cisco Systems, Newbridge Networks and Ungermann-Bass, as well as mainstream semiconductor and systems companies such as Sun Microsystems, Hewlett-Packard, DEC, IBM, AT&T Bell Labs, Toshiba, Siemens-Nixdorf, Hitachi and Tektronix.

One unique asset PMC holds is its Compliance Verification Lab, at which its partners and customers can test products.

"Most people don't have such a lab," Mr. Bailey said. "They depend on customers to test their products for them. That's like peeling the world's largest onion."

PMC-Sierra's Compliance Verification Lab is equipped with an HP VXI ATM Analyzer, HP 300MHz Pulse Generator, HP 26.5GHz Spectrum Analyzer, Marconi 1GHz Signal Generator, MicroWave Logic Jitter Analyzer, Tek 500 Ms/s DSO, Tek 6GHz DSO, Tek Optical Power Converter, Tek Bit Error Rate tester, W&G DS3/DS1 Analyzer, W&G PCM Analyzer, and W&G SONET/SDH Jitter Analyzer.

Mr. Bailey also said PMC-Sierra has early access to HP's ATM test equipment.