3Ware 2004 Annual Report Download - page 17

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Knowledge of Communications ICs and Enterprise Storage
Our systems architects, design engineers and technical marketing and applications engineers have a
thorough understanding of the fiber optic communications and enterprise storage systems for which we design
and build ASSPs. Using this systems expertise, we develop semiconductor and storage connectivity devices to
meet the OEMs’ high-bandwidth requirements. By understanding the systems into which our products are
designed, we believe that we are better able to anticipate and develop solutions optimized for the various cost,
power and performance trade-offs faced by our customers. We believe that our systems knowledge also enables
us to develop more comprehensive, interoperable solutions. This allows us to develop products that fulfill
customers’ system needs from fiber-through-switch fabrics, enabling faster integration into their products.
Design of Communications ICs and Storage Solutions
We have developed multiple generations of products that integrate both analog and digital elements on the
same IC, while balancing the difficult trade-offs of speed, power and timing inherent in very dense high-speed
applications. We were one of the first companies to embed analog phase locked loops in bipolar chips with
digital logic for high-speed data transmission and receiver applications. Since the introduction of our first on-chip
clock recovery and clock synthesis products in 1993, we have refined these products and have successfully
integrated multiple analog functions and multiple channels on the same IC. The mixing of digital and analog
signals poses difficult challenges for IC designers, particularly at high frequencies. We have gained significant
expertise in mixed-signal IC designs through the development of multiple product generations. We will continue
to apply these competencies in the development of more complex products in the future.
We have developed storage connectivity products that interoperate with all SAN topologies and major
operating systems and interfaces. We were the first company to offer Fibre Channel controllers that operate at a
2Gbps rate and were the first to deliver a high performance 10 Gbps InfiniBand HCA module to market. We
intend to continue working closely with leaders in the storage, networking and computing industries to design
and develop new and enhanced storage connectivity products. We believe that establishing strategic relationships
with technology partners is essential to ensure that we continue to design and develop competitive products that
integrate well with solutions from other leading participants in the storage markets.
Research and Development
Our research and development expertise and efforts are focused on the development of high-performance
analog, digital and mixed-signal IC’s for the communications and storage markets, Fibre Channel host bus
adapters and related software drivers and tools for storage applications, and hardware and software solutions for
storage markets such as SATA RAID. We also develop high-performance libraries and design methodologies
that are optimized for these applications. Our primary research and development facilities are located in San
Diego and Sunnyvale, California and Andover, Massachusetts in the United States; LaGaude, France and
Netanya, Israel. During the fiscal years ended March 31, 2004, 2003 and 2002, we expended $112.6 million,
$131.9 million and $154.6 million on research and development activities, respectively.
Our IC product development is focused on building high-performance, high-gate-count digital and
analog-intensive designs that are incorporated into well-documented blocks that can be reused for multiple
products. We have made, and will continue to make, significant investments in advanced design tools to leverage
our engineering staff. Our product development is driven by the imperatives of reducing design cycle time,
increasing first-time design correctness, adhering to disciplined, well documented design processes, and
continuing to be responsive to customer needs. We are also developing high-performance final assembly
packages for our products in collaboration with our packaging suppliers and our customers.
Our PCBA product development efforts are focused on building high-performance Fibre Channel HBA and
SATA RAID adaptors, and related software drivers, tools and products. Before a new product is developed, our
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