The latest Linley Group report on Networking Silicon Market Share provides a breakout of PON FTTH silicon market share for the second year running.. It includes both market size and market share information for all Networking markets, including PON. The key takeaway is that Linley believes the market grew only 20% in dollar size, though I estimate deployments grew worldwide over 50% year over year. Such is life as a semiconductor vendor.
They shared the following data with me.
We estimate the total merchant market for PON ICs was about $90 million in 2006, up 20% from 2005. We estimate PMC-Sierra had a share of about 60%, and we rank Teknovus and BroadLight second and third, respectively. A host of other vendors accounted for the rest of the market. In alphabetic order, these suppliers include Centillium, Conexant, Freescale, and Immenstar.
I estimate Teknovus revenue was $10M last year, derived almost entirely outside of Japan. According to Linley, PMC-Sierra (PMCS) did $54 million, which was almost entirely GE-PON. I still follow Centillium (CTLM) though I am no longer invested, and they reported $4M in revenue last year, some % of which was not directly PON silicon. This puts the GE-PON market at about $65M.
PMC-Sierra revenue grew from $45M in 2005 to $54M in 2006. On an absolute basis, the $300M acquisition looks like a hefty price tag given the growth rate. I thought the acquisition made sense (see “PMC-Sierra Acquires Passave“) and still feel this way (if you read the linked article, I thought PMC paid with overpriced stock). PMC-Sierra needs to use this business to win more silicon content (VoIP, VDSL, Processors) and I still believe they can do this. The numbers do show they are facing a fight outside of Japan as Teknovus appears to be doing well.
As for BPON/GPON, Broadlight revenue was driven almost entirely by BPON sales to Tellabs (TLAB) and Motorola (MOT). The remainder of the merchant silicon market is served by Conexant (CNXT), Freescale (Alcatel (ALU) is their lead customer), and Immenstar (now Cortina). These players account for low single digit share percentages. AMCC (AMCC) appears to have exited the market.
Not quantified in the Linley report are equipment vendors which use in-house designed silicon (ASICs). ASICs play almost no role in GE-PON in Asia, with the exception of OKI which designed their own chip after Centillium failed to deliver working silicon (see “Centillium – Cheap by Any Measure“). While Broadlight supplies the lion’s share of silicon into the BPON marketplace it must navigate the transition of Verizon to GPON. Unlike the GE-PON silicon market, which is supplied almost entirely by two vendors, the GPON silicon market is oversupplied (follow link for details) and faces a much greater ASIC threat.
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Full Disclosure: I currently have no position in any of the companies mentioned.