MOUNTAIN VIEW, CA - May 8, 2001. Purchases of high-speed analog and mixed signal integrated circuits (ICs) used in optical networks will decline by 13% in 2001, according to Strategies Unlimited, a market research firm that focuses on components for optical networks. Orders will stabilize before the end of the year, as the market resumes its growth path to $2.9 billion by 2005. Strategies Unlimited's new report ICs for Optical Communications: 2.5 Gb/s and Beyond provides a comprehensive analysis and forecast of the applications, products, technology, and suppliers of high-speed integrated circuits (ICs) used in fiber optic networks operating at 2.5 to 40 Gb/s.

Two key factors will drive the market for ICs for optical networking in the coming years. The first is the continued increase in data rates in optical networks. Telecommunication carriers' deployment of 40 Gb/sec (OC-768) transmission will require new levels of performance from ICs. At the same time, the build-out of new, high-speed metropolitan fiber rings is increasing the number of optical connections that require high-speed ICs. CMOS, silicon germanium (SiGe), gallium arsenide (GaAs), an d indium phosphide (InP) technologies are now competing to meet these needs.

IC's are needed for optical communications to drive lasers; to amplify detected optical signals; to perform clock recovery in SONET/SDH networks; to multiplex and demultiplex; and to switch traffic within the electronic layer.

According to the report, all semiconductor technologies will participate in the market's increase. Silicon and SiGe devices will dominate at lower data rates. GaAs and InP ICs are expected to lead in 40-Gb/s applications, with emerging InP devices growing at the fastest rate of all technologies.

The report describes key changes taking place in the industry. Traditional merchant communication chip suppliers, such as AMCC, Maxim, and PMC-Sierra, have been joined by system spin-outs, such as Agere Systems, Alcatel Optronics, and STMicroelectronics. Silicon foundries at IBM, TSMC, and UMC are providing a spectrum of technologies to fabless companies. Vitesse, Nortel, Conexant, TriQuint, Fujitsu, and Anadigics continue to hold a strong position in GaAs ICs, but InP is challenging GaAs wi th improved high-speed properties. Hughes Research Lab, TRW, Vitesse, and Nortel have invested signific-antly in InP technology. Others are watching InP technology very closely for the future. Opto Speed, a Swiss company, now offers a monolithically integrating a photodiode with a TIA on an InP substrate.

The semiconductor giant, Intel, has moved into the arena with two acquisitions. Intel first acquired GIGA, a Danish supplier of high-speed silicon up to 10 Gb/s, then followed with the acquisition of Cognet Microsystems, a CMOS start-up has introduced OC-48 and OC-192 physical layer chips.

ICs for Optical Communications: 2.5 Gb/s and Beyond -- Market Review and Forecast is available for immediate delivery at a price of $6,450. For more information on this report, contact Strategies Unlimited at (650) 941-3438, fax (650) 941-5120, e-mail info@strategies-u.com, or check the web site at http://www.strategies-u.com.

Founded in 1979, Strategies Unlimited specializes in market research and strategic consulting directed at the optical networking, optoelectronic, RF/wireless, compound semiconductor materials, and photovoltaics component industries. The company is based in Mountain View, California.