Adaptec 2004 Annual Report Download - page 8

Despite this limitation of IP traffic, there is a growing trend toward the use of VoIP as networks become more data−centric and new
hybrid equipment solutions can handle both ATM and IP.
High capacity data communication over fiber optic systems uses a standard called SONET (for Synchronous Optical Network) in the
Americas and parts of Asia, and which is called SDH (for Synchronous Digital Hierarchy) in the rest of the world. In addition to using
SONET to increase the bandwidth, or capacity, of their networks, many service providers have also deployed equipment that uses an
optical technology called dense wave division multiplexing. Rather than transmitting a single light signal over an optical fiber, dense
wave division multiplexing allows many different light signals (each of a different wavelength) to be transmitted simultaneously. By
deploying this technique at higher transmission rates, carriers can move more signals across transmission lines.
Ethernet is a protocol historically used within an enterprise’s local area networks, or LANs, that is now also used in wide area
networks, or WANs. Service providers are beginning to transport Ethernet traffic over their existing SONET infrastructure because
service providers are familiar with SONET, which provides a relatively efficient way to handle increasing amounts of data moving
from the LAN to the WAN.
Digital Subscriber Line, or DSL, is an access technology that allows for high−speed data communication over existing copper
telephone lines between end−users and service providers. DSL uses a complex digital signal processing technique to achieve typical
downstream data speeds of 1.5 megabits per second and typical upstream speeds of 128 kilobits per second. DSL is largely intended
for residential and small business customers who desire higher speed access to Internet services. With increasing demand for faster
bandwidth, service providers in some regions are beginning to deploy Asymmetric DSL (ADSL2 and ADSL 2+) and Very High
Speed DSL (VDSL) to increase transmission rates over copper wires.
Service providers not only need to transport large amounts of data at high speeds using different protocols and technologies, but they
also experience traffic bottlenecks where high−speed long−haul traffic is handed off to networking equipment in a city center or
region, called the metro area. Enterprises with their own communication networks, particularly those that have integrated high−speed
data storage systems into their businesses, can experience similar bottlenecks. In response, many OEMs are designing faster and more
highly integrated equipment to handle higher data volumes, which must also accommodate multiple communication protocols.
OEMs must meet this demand for next−generation equipment despite reductions in their development teams that previously designed
custom semiconductor solutions for each OEM. Insufficient internal technical resources, coupled with increasing development costs
for custom semiconductors, has resulted in more OEMs outsourcing their communications integrated circuit design, and accelerating
their demand for standard semiconductor solutions which operate at high speeds and comply with multiple protocols.
PRODUCTS
PMC−Sierra designs, develops, markets and supports a broad range of high−performance integrated circuits that process analog and
digital signals in a wide range of speeds and protocols that are used in the telecommunications and data networking industries. We
have
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