Friday, August 20, 2010
Marvell's acquisition Thursday (Aug. 19) of powerline chip maker Diseno de Sistemas en Silicio SA (DS2) follows by less than a year the acquisition of Intellon by Atheros and raises a question: Will Broadcom be next to snap up a powerline player such as Gigle Networks or Spidcom?
The next big play in broadband is delivering carrier services to multiple consumer devices in the home over a variety of wired and wireless networks. That was "by far the dominant theme" at a recent gathering of cable-TV executives this week.
So chip makers need to be able to provide a portfolio of Wi-Fi, powerline, and coax solutions for set-top boxes, gateways and other devices, said Joe Byrne, a senior analyst with the Linley Group (Mountain View, Calif.).
In February, Marvell rolled out a new family of passive optical networking (PON) chips to drive a new thrust into broadband. The DS2 acquisition is a logical follow on so it can provide both its existing Wi-Fi and new DS2 powerline parts for gateways and set-tops powered by the PON devices.
Marvell likely picked up Spain's DS2 for a steep discount. DS2 slid into backruptcy in March despite the fact it was already bouncing back from a steep decline in 2009.
According to Linley Group, DS2 slid from a 10 to a four percent stake in wired home networking ICs in 2009, largely due to what appears to have been a bad year for one big set of carrier customers. Even though DS2's first quarter 2010 sales were as big as all its 2009 sales, it was not enough to keep the company from bankruptcy.
The Marvell acquisition was structured as a buy of patents and other assets. Reportedly that's because DS2 had received some funding from the Spanish government, raising complex governance issues for a more traditional merger.
Powerline technology also can be used to deliver Ethernet over coax. That opens to the door for Marvell to sell to coax based cable-TV providers who mainly support MoCA in the U.S. Besides creating new competition for MoCA leaders Entropic and Broadcom, the Marvell/DS2 deal also keeps alive a strong competitor for backers of the HomePlug powerline technology.
With its February acquisition of PON chip maker Teknovus, Broadcom has been moving in parallel with Marvell into the booming broadband market. Broadcom already has a strong position in Wi-Fi and Multimedia over Coax chips for cable-TV nets, but it lacks powerline favored by some carriers.
Atheros grabbed powerline parts first with its acquisition of Intellon last year. Just last month, the Wi-Fi chip maker made its move into PON, acquiring China's Opulan Technologies Corp. for $72 million.
If Broadcom decides to parallel the steps of Marvell and Atheros into powerline, it has a host of targets. Gigle Networks has been gaining design wins for its parts recently. Spidcom or Arkados might be other targets.
