Adaptec 2003 Annual Report Download - page 9

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We have more than 180 revenue−producing products in our portfolio. Many of our products are designed with standardized interfaces
between chips so our customers can easily develop and implement solutions involving multiple PMC−Sierra products.
We sell our networking products primarily into four areas of the worldwide network infrastructure, which we call the Access, Metro,
Enterprise/Storage, and Consumer−related markets. The following describes PMC−Sierra’s view of these markets and some typical
equipment that may include our chips and chipsets. Due to the complexity of the telecommunications network, it is not possible to
sharply delineate networking functions or markets served. In addition, many of our products may be used in multiple classes of
networking equipment that are deployed across all of the market areas identified below, while some of our other products have highly
specialized applications. For example, our microprocessors can be used in many networking equipment applications (such as
high−speed routers or networked printers), while our Paladin chip may only be used in a single application (power amplification for
wireless base stations). In some situations, different OEMs might use our chips or chipsets in equipment addressing more than one of
the market areas noted below. Further, during the lifecycle of their products, our customers from time to time may redesign their
products and exclude our products from the new design. We are not always aware when customers undertake such actions.
While our current product development efforts are focused on each of the following network infrastructure areas, we derive less than
10% of our current revenues from the storage and consumer markets. One of our key strategies is expand our business in these
markets.
• Access: this area of the telecommunications network infrastructure encompasses wired and wireless equipment that aggregates
transmissions from the home or office and connects that traffic to the metro and the wide area network (WAN). For example, our
semiconductors would be used in equipment such as add−drop multiplexers (which add and drop signals and streams of data from
optical networks) and switches (which direct the data traffic to other destinations within the network). The Access area of the network
involves not only aggregation equipment but also termination equipment, which separates trunk data signals into lower speed,
tributary data signals. Many of our networking devices used in wireline communications infrastructure are also deployed in the uplink
of wireless data traffic to the network.
• Metro: the metropolitan area of the internet infrastructure is predominantly a fiber optic−based network that provides high−speed
communications and data transfer over a city center or regional area. This portion of the network manages traffic inside its own
region and manages traffic between the access and long−haul transport networks for inter−city or international transmission. Our
products are used in metro equipment such as multi−service switches and routers that gather and process signals in different protocols,
and then transmit them to the next destination as quickly and efficiently as possible. The next−generation equipment in the metro
portion of the network that can handle different data protocols is often referred to as multi−service provisioning platforms (MSPPs).
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