Adaptec 2006 Annual Report Download - page 12

Table of Contents
on protocols such as SAS and SATA. We expect the need for faster and more complex devices based on these protocols to increase as next-generation storage
systems are deployed. We significantly expanded our Fibre Channel product offering in 2006 as a result of the acquisition of the Storage Semiconductor Business
of Avago (formerly the semiconductor group of Agilent). We are currently working on developing multi-protocol controllers for our OEM customers as well as
working on a further integration of features and devices to increase performance and reduce cost.
2. Continue to strengthen our overall position in the wide area network (WAN) of the telecommunications market and introduce solutions in the customer
premise market such as residential broadband gateways.
We are working very closely with large companies in the service provider and enterprise markets to help them design and develop standard semiconductor
solutions that we anticipate will meet their performance requirements while lowering their costs. A significant number of our products are used by OEMs that sell
their network equipment to worldwide telecommunications service providers. In 2006 we made a strategic acquisition in Passave Inc. to address the increased
requirement for bandwidth as service providers introduce products such as IPTV and other services globally. We continue to focus our R&D on the growth
segments of Passave’s business, including: last-mile access, metro optical transport, edge routing, multi-service switching, wireless infrastructure, wireline
access, voice-over-IP, and residential broadband gateways.
3. Continue to increase our presence in Asian markets.
We continue to strengthen our relationships and business activity with our Asian customers. In 2006 we entered the Japanese FTTH market in a significant way
through the acquisition of Passave, and we continue to seek further expansion in Korea, Taiwan, and China. To support our customers, we have increased our
sales, service and design center in Shanghai, China and opened a technology center in Bangalore, India in early 2006. Over half of our total revenues were
received from the Asia Pacific region in 2006, which includes China and Japan. Based on PMC’s revenues in 2006, some of our largest customers in the People’s
Republic of China were Huawei, ZTE, and Fibrehome, and in Japan our largest customers were Mitsubishi Electric, Fujitsu, NEC, and Ricoh. Our customers in
Asia are broadening their product offerings in 3G wireless infrastructure, metro optical transport, storage networking, laser and multi-function printers, and
customer premise equipment.
4. Leverage our technical expertise across a diverse base of applications.
We have a strong history of analog, digital, mixed signal and microprocessor expertise and we are able to integrate many of these functions and protocols into
complex devices. 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 from companies such as ours 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 and storage equipment
that allows the OEMs to reduce their development costs and improve time-to-market while differentiating their products in other ways. We are constantly looking
at ways to lower costs and increase integration for our customers, such as our capability in system-on-a-chip (SoC) design capabilities that can incorporate third
party intellectual property and various interface requirements.
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Source: PMC SIERRA INC, 10-K, March 01, 2007 Powered by Morningstar® Document Research℠