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Annual Report
communications networking equipment industry. Our products and solutions that are sold into the Enterprise
Infrastructure market are driven primarily by the capital spending of corporations, enterprises and smaller
businesses. In 2009, our revenues were derived approximately 50% from the Communications Infrastructure
market and 50% from the Enterprise Infrastructure market.
The general market areas that we currently serve and some typical equipment in those markets that contain
our semiconductor solutions are described below. Due to the complexity of the global communications 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 others have highly specialized applications.
Communications Infrastructure
The Communications Infrastructure market encompasses wired, wireless and Passive Optical Networking
(“PON”) devices used in access, aggregation and transport equipment such as optical transport platforms, edge
routers, multi-service switches, and wireless base stations that gather and process signals in different protocols,
and transmit them to the next destination.
For high-capacity data communication over fibre optic systems, the standard used is Synchronous Optical
Networks (“SONET”) in North America and parts of Asia, and is Synchronous Digital Hierarchy (“SDH”) in the
rest of the world. In addition to using SONET/SDH to increase the bandwidth or capacity, of their networks,
many service providers have started implementing packet-based transport equipment in the core and access
portions of the network using the new standard called Optical Transport Network (“OTN”).
With demands for access bandwidth increasing, PON is being deployed by carriers worldwide to facilitate
higher speed service to residences and enterprises. Instead of copper cables, fibre is deployed to the
neighborhood, the multi-dwelling unit or the residence, to increase bandwidth and improve the uploading and
downloading files in both directions. The advantage of PON is that it provides high bandwidth without sensitivity
to the distance between the central office and the subscriber. This technology is being deployed in Japan, China,
Korea and the United States (“U.S.”).
Our solutions are used in equipment such as aggregation, multi-service provisioning platforms, routers and
optical transport platforms 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 networking equipment can efficiently
handle different data protocols and is often referred to as “multi-service” because it can facilitate the
transmission of Internet Protocol (“IP”) packets and Time-Division Multiplexing (“TDM”) signals over optical
fibre. We are developing complex architectural silicon solutions to help our customers manage the increasing
level of diverse traffic in the Wide Area Network to handle voice, video and data services. The Wide Area
Network also involves the termination and distribution of separate higher speed data signals into lower speed
data signals. Many of our devices that are used in wireline communications equipment can also be deployed in
the backhaul transport of wireless data from base station transceivers and base station controllers.
Enterprise Infrastructure
Our products and solutions in the Enterprise Infrastructure market enable the high-speed interconnection of
the servers, switches and storage devices that comprise these systems thus allowing large quantities of data to be
stored, managed and moved securely. Our focus in this area is developing interconnect devices and controllers
for Fibre Channel, Serial Attached SCSI (“SAS”) and Serial ATA (“SATA”). We are shipping next-generation
solutions for 8 Gbps Fibre Channel controllers for high-performance storage systems in the Storage Area
Network (“SAN”) and Network Attached Storage (“NAS”) markets, as well as 6 Gbps SAS/SATA controllers
and expanders for this market. PMC-Sierra has also developed semiconductor and adaptor solutions for the 6
Gbps server-attached storage market.
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