Motorola spinoff introduces new chip

By Marguerite Reardon
Staff Writer, CNET News.com

Published: June 21, 2004, 5:07 PM PDT

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Freescale Semiconductor, a spinoff of Motorola, has developed an integrated chipset that it says will make it easier and less expensive for carriers to bring fiber access to homes and small businesses.

On Monday, the company announced the MPC8340BPON, a chip that integrates four separate functions into one. The new chipsets allow equipment makers to build more affordable gear that enables broadband services over a passive optical network (PON) at a much reduced cost.

PON is an optical access technology that lets multiple homes or businesses in a neighborhood share fiber from a service provider's central office. It offers carriers that are looking to launch higher-speed broadband services a cheap alternative to outfitting every home and business with a direct fiber connection. At the same time, it provides much more bandwidth than the traditional copper infrastructure used in most carrier networks today.

Freescale's chipset integrates B-PON, or Broadband PON, functionality with its e300 core communication processors. B-PONs use either Asynchronous Transfer Mode or Ethernet to transport voice, data and video traffic. The B-PON standard has been approved by the International Telecommunication Union. It supports data rates of up to 622 megabits per second out to an endpoint and back from the customer to a service provider's remote aggregation point.

Fiber to homes and businesses has been slow to take off here in the United States. Verizon Communications and SBC Communications have announced plans to construct "fiber to the premises," or FTTP, networks, but large-scale installations are still a long way off.

The situation is quite different in Asia, especially in Japan, where demand for fiber to homes and businesses is growing. At the end of last year, there were more than 890,000 homes worldwide with fiber access, according to research and consulting firm RHK. PON systems accounted for about 40 percent of those networks. B-PON made up a significant portion of these PON systems.

Freescale, which is wholly owned by Motorola, recently priced shares of its stock for an initial public offering. Its goal is to raise $2.7 billion, according to the most recent filing with the Securities and Exchange Commission.

The company has filed to trade on the New York Stock Exchange under the symbol "FSL." After it goes public, Motorola will still be the primary owner, but the company plans to gradually reduce its ownership in Freescale by distributing the shares to its shareholders before the end of 2004. Motorola is also one of the largest customers for Freescale chips.

Initial samples of the new chipset will be available in the fourth quarter of 2004, according to the company.

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