Marvell Technology has swooped to buy the bankrupt assets of Spanish powerline chip maker DS2 this week, opening up an entirely new front for the US chip designer, which purchased the first generation Intel mobile chip business and which is riding high right now on the back of 40% growth, healthy profitability and climbing assets.
Probably the only reason for DS2’s failure to break into the big time with its UPA Powerline chips, which can either deliver broadband to a home over power lines or distribute it around a home the same as HomePlug devices, has been because it was not a US company, with the access to funding that this might have brought.
With Marvell taking control and promising to continue to deliver to existing DS2 customers across the range, and with its central position in the next generation G.Hn architecture which promises the same chips for high speed communication over power, coax and twisted pair, its fortunes are likely to change.
Marvell will add powerline to its cellular, Ethernet, cable and DSL product lines which are for the most part a result of opportunistic acquisitions, like this one.
There were no details given about the price it paid for DS2, but it will have been a distressed sale, and therefore fairly cheap and it means that all DS2 debts don’t come with it.
Given that Marvell’s last quarter was almost $900 million, with $220 million net income and generated $292 million in free cash flow and that the company has $2.3 billion in the bank, and is planning to buy back $500 million of its shares, Marvell can certainly afford to invest in one or two new areas. It puts it recent performance down to a 50% hike in sales of mobile chips and 140% rise in its networking chips.
The question now will be whether or not Marvell continues to invest in G.Hn. Without DS2’s contribution the home networking standard is almost certain to falter or slow to a crawl, as it was one of the only drivers in the powerline area.
Already the G.Hn standard is up against strong opposition from the new combination of HomePlug and MoCA, not to mention HPNA during a period while there are desertions from Powerline to Homeplug including France Telecom and Deutsche Telekom.
If Marvell does take up the G.Hn gauntlet it will also be up against Sigma Designs’ CopperGate, which makes HPNA chips and will almost certainly be coming into the chip frame on G.Hn. There is certainly room for two players in the early market, although there may be a lot more.
Ikanos, Lantiq and and Xingtera are all specialist small chip designers in the area saying they will make G.Hn chips and the heavy mob of Atheros and Broadcom say they will have a place on their future roadmaps, but with no timescale given.
However recently MoCA and HPNA have begun ramping existing installations into the millions and may have longer lives than anyone anticipated, something underscored by Broadcom’s arrival in the MoCA arena. This would reduce the potential footprint for G.Hn.
G.Hn promises speeds up to 1 Gbps, home remote management, QoS data guarantees, low power consumption and eventually really cheap chip prices.
Meanwhile Marvell is also attacking the Portable Navigation Device industry in a tie up with US device maker Ryden, announced this week. They have brought out the Android based Gcom 701 using Marvell’s Armada 166 application processor, expected to ship in November.
The device is more like a fully fledged tablet computer and comes with a 7 inch TFT touch panel with 800 x 480 pixel resolution, and also offers Web surfing, the ability to read eBooks and view images and video. It comes with WiFi, GPS and Bluetooth connectivity, removable memory, a front-facing camera but for the most part functions as a portable navigation device using Navteq maps and software.