Chips for the 3G handset market have garnered a lot of attention over the past few months, but companies are also moving quickly to provide platforms required to build 3G infrastructure equipment.
One of those companies, PMC-Sierra Inc., last week announced it will acquire Datum Telegraphic, a developer of technology for CDMA and other emerging 3G protocols, in a stock exchange valued at about $125 million.
PMC-Sierra will use Datum's technology to help build chipset architectures for 3G wireless-infrastructure equipment expected to begin rolling out next year, according to company executives.
"These systems will require new classes of technology and ground-up design for the 3G class of equipment," said Glenn Bindley, vice president and general manager of the Access Products Division at PMC-Sierra in Burnaby, British Columbia. "We believe that, based on customer feedback and response, this will be a key piece of technology for mass deployment of third-generation devices."
Datum, Vancouver, British Columbia, has developed a DSP-based technology that will allow for the transmission of major digital wireless standards, including W-CDMA, EDGE, and cdma2000, using a single, digitally controlled power amplifier. Current equipment requires the use of multiple amplifiers.
"What they've got is breakthrough technology," said Will Strauss, an analyst at Forward Concepts Co., Tempe, Ariz. "The use of a single big amplifier, rather than many big amplifiers, is truly an advance, if it works as advertised."
Datum has developed a board-level ASIC implementation of its technology that PMC-Sierra plans to move into a chip solution that will be available late this year, Bindley said.
The chip is expected to be deployed in Japan in 2001, he said. Datum is currently working with three wireless-infrastructure equipment suppliers, whose names have not been disclosed.
"We believe this can be a very substantial business for us, growing to more than $100 million over the next few years," Bindley said.
PMC-Sierra, which reported net income of $67.7 million on revenue of $245.2 million in 1999, and net income of $28.2 million on revenue of $97.7 million in the first quarter of this year, last month announced its acquisition of Malleable Technologies.
That acquisition is being completed via a stock purchase valued at about $250 million. Malleable is a San Jose-based fabless semiconductor supplier of DSPs optimized for voice-over-packet applications.
Both of PMC-Sierra's recent acquisitions are expected to be completed later this quarter.