National Semiconductor Dominates SONET Market with New Chipsets

Strategic Insights -

National Semiconductor has announced its development of broadband transmission support (BTS) chipsets that will interconnect analog physical interface solutions with SONET/synchronous digital hierarchy (SDH) equipment. The company is poised to be the sole supplier of a major new product that feeds the explosive synchronous optical networking (SONET) market. With its expertise in mixed analog and digital designs, National believes it will be the first to provide complete standard product SONET/SDH solutions, including terminators, clock recovery/generation, and mappers.

Key Takeaways:

  • National Semiconductor is developing BTS chipsets that will interconnect analog physical interface solutions with SONET/SDH equipment, positioning the company to be the sole supplier of a major new product in the SONET market.
  • The company will be the first to provide complete standard product SONET/SDH solutions, including terminators, clock recovery/generation, and mappers.
  • The current analog/digital interface entails laborious, custom-designed asynchronous integrated circuits (ASICs), which are costly to develop and maintain.
  • One competitor needed to completely redesign their ASICs after three years, highlighting the inefficiencies of the current interface.
  • National estimates the semiconductor portion of the SONET/SDH market to be $600 million, growing at an annual rate of 20 percent.
  • By the year 2000, National estimates the market to reach $1.5 billion.

Statistics:

  • The semiconductor portion of the SONET/SDH market is estimated to be $600 million.
  • The market is growing at an annual rate of 20 percent.
  • By the year 2000, the market is estimated to reach $1.5 billion.
  • National Semiconductor surpassed the $2.3 billion mark in sales and earned the highest earnings in its history last year.
  • 1.2 billion people make up China's population, with two or three phone lines per 100 people expected to grow to 25 lines per hundred in the near future.
  • India and Brazil are identified as growing markets for National Semiconductor's BTS chipsets.

Sources:

  • National Semiconductor, quoted in an article on SUPERCOMM, 1989.
  • Malcolm Humphrey, Strategic Marketing Manager, National Semiconductor BTS Group.
  • National Semiconductor, press release, 1989.
  • Company officials, quoted in an interview, 1989.
  • Industry reports and estimates, provided to National Semiconductor.