Triductor may fill gap in China's comms ecosystem

Julie Kunstler/Ovum
24 Jul 2014
00:00

Ovum has discussed China’s strength as a supplier of communications components and equipment, with frequent analysis of Huawei, ZTE, Fiberhome, Accelink (WTD), Hisense, and Innolight among others.

We also noted the absence of Chinese merchant communications chip vendors. Triductor, a venture-backed Chinese start-up that announced merchant xDSL and G.hn chips this year, may signal a change in that regard.

China is home to many optical component and communications equipment vendors, with products supporting telcos, OTT players, and data centers. Until now the country’s ecosystem has lacked a merchant communications chip vendor: there is no Chinese equivalent to fabless chip giants such as Qualcomm or Broadcom or even to smaller players.

China is home to non-merchant chip developers such as HiSilicon, Huawei’s ASIC design center, but there is a significant difference between merchant and non-merchant chips. Merchant chip developers work closely with standards groups (e.g. ITU and IEEE). Why? Because chip interoperability is a basic requirement of communications equipment vendors seeking a flexible source of supply.

Merchant chips are designed to easily fit into third-party devices. While these chips may not be truly off-the-shelf in terms of plugging right into equipment, they are designed to require minimal if any customization. The business model of merchant chip vendors requires large-volume sales with minimal support.

China has lagged in the merchant communications chip market. Successful chip design requires experienced chip design engineers. Mistakes are expensive since tape-outs, the initial phase of chip production for testing and sampling, cost upwards of $1 million. Chip design takes time and requires costly design tools – not a good fit for China’s VCs, who have preferred smaller investments and shorter payback time horizons.

Over the past several months, Triductor has made the headlines with the availability of xDSL chips (supporting VDSL2 and earlier DSL standards) and G.hn chips. The CEO has extensive chip design experience, having spent time at US-based Voyan Technology and ElectriPHY. He holds a Ph.D. in electrical engineering from UCLA. Venture funds are supplying the necessary capital for tape-outs and tools.

It is too early to predict Triductor’s future, but it may signal a change in the China communications ecosystem.

Julie Kunstler is a principal analyst for intelligent networks at Ovum. For more information, visit www.ovum.com/

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