Adaptec 2002 Annual Report Download - page 7

o Serializers/Deserializers: these devices convert networking traffic
between slower speed parallel streams and higher speed serial streams.
OEMs use serial streams to reduce networking equipment line
connections, and parallel streams to allow them to apply lower cost
traffic management technologies.
o Microprocessors: these devices perform the high−speed computations that
help identify and control the flow of signals and data in the many
different types of network equipment used in the communications,
enterprise and consumer markets.
STRATEGY
Our high−speed semiconductor solutions are based on our strong knowledge of network applications, system
requirements and networking protocols. To achieve our goal of growing and profitably expanding our business,
we are pursuing the following key strategies:
Leverage technical expertise across diverse base of applications:
We have a history of analog, digital, mixed signal and microprocessor expertise and we integrate many
functions and protocols into our products. We leverage our common technologies and intellectual property
across a broad range of networking equipment. Many OEMs recognize they can obtain highly complex, broadband
communications technology "off the shelf" from companies such as PMC−Sierra rather than dedicating their own
resources to develop custom chips. We intend to take advantage of our customers' growing requirements to
outsource more of the silicon content in their networking equipment which will allow the OEMs to reduce
their development costs and improve time−to−market while differentiating their products in other ways.
Broaden our business into the Enterprise, Storage and Consumer markets:
The majority of our products are used by OEMs that sell their networking equipment to telecommunications
service providers worldwide. Over the past year, however, we have been focused on directing many of our
existing and newly designed products into new markets. For example, our advanced
serialization/de−serialization devices are now being used in transceiver and serial backplane applications
in storage area networking and enterprise networking equipment. Our lower−speed microprocessors are being
designed into advanced multi−function devices as well as going into consumer applications such as personal
video recorders, set−top boxes and high−definition TVs. We are working closely with some of the largest
players in the enterprise and storage markets to help these customers design and develop standard
semiconductor solutions that will lower their costs and improve their time to market.
Increase our presence in Asian markets:
Over the past decade, we have been developing strong relationships with our Asian customers. In 2002, just
under one−third of our total revenues were generated in the Asia Pacific region. Some of our largest
customers in Japan and Korea include Fujitsu, Ricoh, NEC, Samsung and LG Electronics. In addition, we are
gaining new customers, many of which are located in the People's Republic of China, such as ZTE, Huawei
Technologies, Fiberhome Telecommunciation Technologies, and Alcatel Shanghai Bell. These customers are
broadening their product offerings to meet the growing network infrastructure requirements in China and
other Asian markets. To improve our customer service and penetration into this region, we appointed a new
vice president to head our Asia Pacific sales and support team, headquartered in Shanghai. PMC−Sierra plans
to continue increasing the number of sales/marketing personnel in our Asia Pacific operations and to add new
distribution capabilities in the regional markets.
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