Analog Devices Inc, the Norwood, Massachusetts-based digital signal processor company, is celebrating a major contract with 3Com Corp under which it will supply a new modem on a chip that could deliver substantial cost savings. The chip, custom designed for 3Com’s US Robotics modem division, replaces the five discrete integrated circuits currently found in US Robotics 56K modems, integrating them onto a single die, and reducing power consumption requirements. That’s not good news for Texas Instruments Inc, which has hitherto provided three of those chips, including a digital signal processor. The ADI chip will have all the same functions as 3Com’s current offerings, including a software programmable DSP, which 3Com uses to upgrade modems and communications equipment to support new protocols. 3Com gets exclusive distribution rights for the chip, for its own use and for resale to other modem manufactures, if it chooses. The chip is currently sampling, and supposedly ready for production soon, although 3Com isn’t saying when it will release products. No other technical details were revealed. Texas Instruments insists the deal does not affect its long term relationship with 3Com, and says it remains the core strategic supplier of customizable DSP chips to 3Com, with ongoing development projects intended for products that will go into production next year. It views the ADI contract as a niche deal. But 3Com’s custom represents a significant chunk of TI’s business – enough to spur analysts Rodman & Renshaw into cutting TI’s rating to neutral from buy after 3Com reported slower modem sales earlier this month (CI No 3,303). Back in August, TI said it had shipped over 13 million 56kbps chipsets compatible with 3Com’s x2 technology (CI No 3,218). No doubt timed for maximum PR value, TI rolled its 35 millionth digital chip off the production line just after the ADI announcement, and shipped it, of course, to 3Com.
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