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UILKA
if they use Altera Hardcopy it will no be any loss of revenue for Altera
gmeenus
This is not the first time that Huawei is using ASICs. In fact it had used ASICs ...
Huawei using ASICs for first time
Dylan McGrath
10/24/2012 10:43 AM EDT
GARDEN GROVE, Calif.—Chinese telecom and networking equipment vendor Huawei Technologies Co. Ltd. is using ASICs in some of its gear for the first time, displacing FPGAs supplied by Altera Corp. The development is expected to cut Altera's sales and could deal a blow to the disputed notion that FPGAs are steadily capturing sockets traditionally held by ASICs.
John Daane, Altera's president, chairman and CEO, said following Altera's third quarter earnings report Tuesday (Oct. 23) that two customers have in recent months converted three high-volume designs to ASICs. Daane did not identify the customers, but said one of the two was Altera's largest customer, believed to be Huawei.
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According to Christopher Danely, an analyst with JP Morgan, Huwaei accounted for about 16 percent of Altera's third quarter sales, making it Altera's largest customer. According to Danely, Huawei was the last major telecom equipment OEM that exclusively used programmable logic.
In a report circulated late Tuesday, Danely said he ranks Huawei as the single largest buyer of FPGAs, spending about $350 million per year—about 1 percent of Huawei's annual revenue. Huawei buys about $300 million worth of FPGAs from Altera each year, according to Danely.
Danely estimates that Altera could lose about $150 million in annual revenue over the next year or so as Huawei makes the transition from using programmable logic exclusively to using a mix of both ASICs and programmable logic. A similar decline in programmable logic revenue occurred several years ago when EMC Corp. transitioned from an FPGA-only model to a mix of FPGAs and ASICs, Danely said.
To make matters worse for Altera, Danely said Xilinx Inc., the market leader in programmable logic, is expected to benefit from its first major design wins at Huawei.
Both Altera and Xilinx have argued that trends in recent years favor FPGAs over ASICs, with companies converting sockets to FPGAs to get to market more quickly and save on non-reoccurring engineering costs. But both companies acknowledge that ASICs are more cost effective in high-volume applications.
Daane said Tuesday that rising design implementation and wafer costs at advanced nodes would further accelerate the trend of ASIC replacement by programmable logic.
Altera reported third quarter sales of $495 million, up 6 percent sequentially but down 5 percent year-over-year. The company reported a net income for the quarter of $157.5 million, or 49 cents per share, down 3 percent sequentially and down 15 percent year-over-year.
Altera's third quarter sales were in line with consensus analysts' expectations. The company did not provide a fourth quarter sales target.
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John Daane, Altera's president, chairman and CEO, said following Altera's third quarter earnings report Tuesday (Oct. 23) that two customers have in recent months converted three high-volume designs to ASICs. Daane did not identify the customers, but said one of the two was Altera's largest customer, believed to be Huawei.
[Get a 10% discount on ARM TechCon 2012 conference passes by using promo code EDIT. Click here to learn about the show and register.]
According to Christopher Danely, an analyst with JP Morgan, Huwaei accounted for about 16 percent of Altera's third quarter sales, making it Altera's largest customer. According to Danely, Huawei was the last major telecom equipment OEM that exclusively used programmable logic.
In a report circulated late Tuesday, Danely said he ranks Huawei as the single largest buyer of FPGAs, spending about $350 million per year—about 1 percent of Huawei's annual revenue. Huawei buys about $300 million worth of FPGAs from Altera each year, according to Danely.
Danely estimates that Altera could lose about $150 million in annual revenue over the next year or so as Huawei makes the transition from using programmable logic exclusively to using a mix of both ASICs and programmable logic. A similar decline in programmable logic revenue occurred several years ago when EMC Corp. transitioned from an FPGA-only model to a mix of FPGAs and ASICs, Danely said.
To make matters worse for Altera, Danely said Xilinx Inc., the market leader in programmable logic, is expected to benefit from its first major design wins at Huawei.
Both Altera and Xilinx have argued that trends in recent years favor FPGAs over ASICs, with companies converting sockets to FPGAs to get to market more quickly and save on non-reoccurring engineering costs. But both companies acknowledge that ASICs are more cost effective in high-volume applications.
Daane said Tuesday that rising design implementation and wafer costs at advanced nodes would further accelerate the trend of ASIC replacement by programmable logic.
Altera reported third quarter sales of $495 million, up 6 percent sequentially but down 5 percent year-over-year. The company reported a net income for the quarter of $157.5 million, or 49 cents per share, down 3 percent sequentially and down 15 percent year-over-year.
Altera's third quarter sales were in line with consensus analysts' expectations. The company did not provide a fourth quarter sales target.
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nicolas.mokhoff
10/24/2012 12:47 PM EDT
Huawei: you wonder what is going on in their move against the grain of using more FPGAs than ASICs in the industry at large. More control, more security, hm...
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rick.merritt
10/24/2012 8:14 PM EDT
A Huawei contact told me the company--like its rival Cisco--has been using ASICs for some time, many designed, I suspect, by its giant HiSilicon division.
Apparently Huawei or some big company is now converting many of the Altera FPGAs it uses into ASICs. That usually indicates the systems are moving from relatively small to large volumes.
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GREAT-Terry
10/25/2012 8:48 AM EDT
It is a trend to use ASIC to replace FPGA, especially Huawei's subsidiary HiSilicon is also making a lot money from their chips in telecom market.
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BobsUrUncle
10/26/2012 7:58 AM EDT
Maybe it's to hide their spyware. An FPGA bitstream can be reverse engineered, but it's harder to reverse engineer an ASIC.
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danny1024
10/26/2012 1:48 PM EDT
No more FPGA for the PLA
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gmeenus
10/30/2012 3:57 AM EDT
This is not the first time that Huawei is using ASICs. In fact it had used ASICs for their backplane ( and perhaps other hw) in their teleocm fibreoptic equipment - way back in early 2000s. At that time, its design team (later spun out as HiSilicon) implemented ASICs with the help of various ASIC vendors - Meenu
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UILKA
11/4/2012 5:58 PM EST
if they use Altera Hardcopy it will no be any loss of revenue for Altera
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