WiFi chip startup Bermai shuts down

Yet another victim of a cut-throat, low-cost chip market, the company will layoff all 55 employees and offer its intellectual property for sale.

"It was very sudden news," said Neil Hamady, who was director of marketing for Bermai (Palo Alto, Calif.). It also had divisions in Minnesota and Colorado. "We had been trying for three months to raise Series C funding and, for a time, we thought we'd be successful. But the deals started unraveling and the investors pulled back."

The closure leaves Airgo Networks and IceFyre Semiconductor as the last North American startups standing against Agere, Atheros Semiconductor, Broadcom, Marvell, Philips, Conexant, RFMD (which bought Resonext) and, more recently, Intel Corp.

Hamady had some advice for remaining competitors: "Price erosion will drive everyone out of the market," he warned, calling the market saturated. "Look for other solutions, such as converged wireless LAN/cellular combinations or DVB-H [digital video]." The only way to make headway is "to innovate on the RF side — that's where the opportunities are."

Bermai entered the market in March 2002 with $15 million in first-round funding.