TEL AVIV -- Israel's Metalink Ltd. is not yet widely known in North America, but the manufacturer of digital subscriber line chips is taking several steps to expand its presence and market share in the region.
Metalink, which supplies symmetric DSL (SDSL) chipsets for business-oriented applications, has recently floated an initial public offering in the United States, expanded its product lines, and shifted its North American headquarters from Mountain View to Folsom, Calif.
The company is beefing up its management team by recruiting several executives and engineers from DSL-chip competitor Level One Communications Inc., a Sacramento, Calif.-based subsidiary of Intel Corp.
Metalink has also just opened a 7,000-sq.-ft. IC-design center in Folsom. Heading the center is John Camagna, formerly a design manager at Level One.
These various activities are meant in particular to bolster Metalink's U.S. presence, according to president and chief operating officer J. Francois Crepin. A former executive at Level One and other chip makers, Crepin joined Metalink last May.
"Metalink has a significant presence in Europe; our chips are being used by every major carrier there,'' Crepin said. "But recently, we decided to expand our presence in North America. Clearly, there's a lot of DSL activity in North America.''
Metalink is one of a handful of chip makers focusing on the replacement in businesses of costly E1/T1 lines with less costly DSL technology. Other SDSL-chip suppliers include Conexant Systems, GlobeSpan, and Level One.
And while the consumer-oriented asymmetric-DSL market gets most of the attention, the business-oriented DSL market is booming. DSL for U.S. businesses is expected to grow from 227,000 installed lines in 1999 to 436,000 this year, and by 2003 to 2.16 million installed lines, according to In-Stat Group, of Scottsdale, Ariz.
This market, however, is complex, with a number of technologies-including HDSL, HDSL-2, SDSL, and SDSL-2-all competing to replace T1/E1 lines.
Developed several years ago, HDSL (high-bit-rate DSL) is a fixed-rate, symmetric-based technology that uploads and downloads data at 1.5 megabits per second over two pairs of copper wire at a fraction of the cost of TI/E1. The newer HDSL-2 transports data at 1.5 Mbits/s over a single pair of copper wire, making it less expensive than either HDSL or T1/E1.Unlike fixed-rate HDSL, SDSL is a multi-rate technology that transports data from 144 Kbits/s to 2.3 Mbits/s or faster, depending on a customer's requirements.
Chip makers, OEMs, and carriers hope to soon ratify an interoperable-SDSL standard known as G.SHDSL, which provides data rates similar to SDSL.
Metalink is marketing a family of chips for SDSL-based applications, while pushing for the G.SHDSL standard. The company has no intention, according to Crepin, of entering the more glamorous ADSL-chip market.
"Most of the DSL activity right now is in SDSL, not ADSL," he said. "I had an ADSL modem at home, but I had to take it back. It's not that much more expensive to get SDSL services in the home.''
It remains unclear, however, if SDSL will ever reach the home, which is being heavily targeted by cable-modem as well as ADSL products. Thus Metalink's plans call for making a big dent on the corporate side of the DSL market, especially in North America, where the company is gaining some ground, Crepin said.
"Today, Conexant is No. 1 in North America [in DSL for businesses]. But in less than 18 months, we have risen to No. 2,'' he said.
Metalink's SDSL sales will grow from $9.1 million in 1998 to $11.4 million in 1999 and $16.5 million in 2000, according to Banc of America Securities LLC in San Francisco. And while it is in the red right now, Metalink is expected to show a profit by 2001, Banc of America Securities said.