In 1998, Infineon entered the ADSL chip market by rolling out a product that supported G.Lite, a stripped-down version of full-rate ADSL technology. G.Lite is a consumer-oriented, digital-modem standard that transports data at speeds up to 1.5-megabits-per-second, while the full-rate ADSL standard moves information at 8-megabits-per-second.

"We proved the concept of G.Lite," said Mark Tyndall, vice president of business development for the Communications Business Group at Infineon, in an interview with SBN on Friday. "However, the G.Lite market has not taken off. Our focus is on [full-rate] ADSL," Tyndall said.

Officials from the Munich, Germany-based chip giant were in San Francisco last week to brief members of the press about the company's communications chip strategy.

Infineon is not giving up on DSL, however. On the contrary, the DSL chip market is one of the company's most strategic product areas. For example, in September, it rolled out a chip that supports the full-rate ADSL standard. And, it is also pushing a line of chips for two other types of DSL technology, including symmetric DSL (SDSL) and very-high-bit-rate DSL (VDSL).

But the company's disclosure to de-emphasize its G.Lite chip line comes as no surprise to analysts and observers. Developed in 1998 by Compaq Computer Corp., Intel Corp., and Microsoft Corp., G.Lite originally was supposed to hit the mass markets in late 1999, but the technology has yet to be endorsed by the major carriers in the United States and elsewhere.

G.Lite was envisioned as a low-cost, always-on technology that could be easily deployed to the masses. Unlike ADSL, G.Lite does not require the installation of a "splitter" at the home to separate the phone and data services that traverse a shared line.

However, G.Lite encountered major problems in field tests, due in part to compatibility issues among chip and equipment suppliers. Data-connection rates were also hindered, due in part to the poor quality of copper wiring in most households. And signaling problems between the phone line and the modem forced carriers to install an expensive passive component called a microfilter in every phone jack.

Demand for G.Lite was also poor, Tyndall said. "It's disappointing," he said. "We did not see any demand for it."

Instead, the company will push its full-rate ADSL chip line, which will begin shipping in volumes in the first half of 2001, he said. The company is also banking on a high-end ADSL technology--VDSL, which promises to move data, voice, and video at speeds up to 26-megabits-per-second to homes and businesses.

In April, it acquired Savan Communications Ltd., a supplier of VDSL chip sets (see April 27 story). At present, Infineon is sampling prototype chips based on Savan's technology, with volume shipment slated for 2001.

"The VDSL market is between us and Broadcom," Tyndall said, referring to Broadcom Corp., the high-flying communications chip supplier in Irvine, Calif.

The German chip maker is also sampling a circuit designed for use in an emerging business-oriented, SDSL-based standard called G.SHDSL. Announced earlier this year, the company's chip will also move into product in the first quarter of 2001.

G.SHDSL is a multi-rate, SDSL-based technology that transports data at speeds up to 2.3-megabits-per-second over existing copper pairs. The International Telecommunications Union (ITU) is expected to ratify the so-called "G 991.2 SHDSL" standard by February, 2001.

Other competitors in the SDSL chip market include Conexant, Intel, GlobeSpan, Metalink, Virata, and others. According to Cahners In-Stat Group of Scottsdale, Ariz., the worldwide demand for SDSL systems will grow at an annual growth rate of over 76% and will reach 9.7 million units by 2004.

"Our biggest competition [in G.SHDSL] will come from GlobeSpan," Tyndall said.