Brecis expands orders for broadband chips from Taiwan

Taipei, March 6, 2003 (CENS)--Brecis Communications Corp. of the United States, a leading designer of broadband chips, will contract more production of its chips from Taiwanese dedicated chip foundry providers this year to cut costs.

Brecis CEO and president George Alexy recently said in Taipei that his company will source several million chips from Taiwanese chip companies this year, many times more than last year's volume. His company has contracted United Microelectronics Corp. to make the chips and Advanced Semiconductor Engineering (ASE) to assemble them.

Alexy forecast world shipment of broadband chips to soar this year due to the soaring demand for such chips in wireless local area network (WLAN), voice over the Internet Protocol (VoIP), network security and digital subscriber line (DSL) equipment. He predicted number of DSL-service subscribers would rise to around 60 million by the end of this year from last year's 36 million.

He also expected DSL subscribers to outnumber cable-modem subscribers in the Untied States for the first time this year. For a long time, the U.S. has been the world's largest market for cable modems.

Taiwanese chip designer Realtek Semiconductor Co., Ltd. And other newcomers are challenging established players in the broadband chip market, such as Conexant Systems Inc., Samsung Electronics, Brecis and ADMtek Inc. Some of the suppliers have cut prices of their router processors to only US$6 or US$7 a chip in hope of quickly expanding their market share in Taiwan, which accounts for nearly half of Brecis' shipments every year.

In response to the new competition, Brecis recently rolled out a patented chip called the Multi-Service Processor (MSP) at around US$10 per ship. According to Brecis Taiwan executives, the chip has an edge over rival devices by incorporating security appliances, broadband routers, multi-service access devices and VoIP gateways. They expect the smart chip to edge out other low-margin chips from the market soon.

Brecis also plans to install a marketing and service team at its Taiwan branch to promote the MSP.