EE Times' Rick Merritt provides a good breakdown of this week's big late-breaking news story in the comms cabling space: PCIe data center platform specialist PLX's acquistion of 10GBase-T silicon PHY provider Terantics. Linley Group senior analyst Jag Bolaria says the deal offers shelter for Teranetics, one of a handful of start-ups in the slow, crowded 10Gbit/s over copper chip market.
As Merritt reports:
The deal is likely a win/win, [said Bolaria]. Teranetics likely needed more investment before it could be profitable, and PLX needed the technology to expand beyond its core PCI chip business.
The market for 10Gbit/s Ethernet over copper has been slow to ramp, putting pressure on a handful of startups in the field including Teranetics. Investors are likely pressuring the startups, most of which has raised as much as $100 million each, to find an exit via acquisition.
Demand for the so-called 10GBase-T devices "probably won't ramp to significant volumes until the second half of 2012 in tandem with some of Intel Sandy Bridge server platforms," said Bolaria. "By that time large competitors such as Broadcom could be at 28nm and startups may need more money to stay on their process road maps," he said.
PLX is hungry for growth under a relatively new chief executive and with revenues that have peaked in recent years to about $80 million. With Teranetics it gets access to the leading edge serdes technology in the 10GBase-T devices, something it can apply to a broad range of interconnect markets.
"To date, PLX has licensed high-speed serdes from companies like Gennum, but an interconnect company without its own serdes technology is a difficult play," said Bolaria.
PLX will face big challenges going head-to-head with giants such as Broadcom and Marvell in Ethernet markets, Bolaria said. However, it may apply its new serdes technology to a range of underserved interconnect markets in areas such as Fibre Channel and backplanes, he added.
SOURCE: EE Times