This excerpt taken from the PSEM 10-K filed Sep 20, 2007.
INDUSTRY BACKGROUND OVERVIEW
Electronic systems and subsystems create the fabric that increasingly supports our everyday modern life as evidenced by the continued growth of the personal computer, mobile communications, networking and consumer electronics markets. Systems characterized by ever-improving performance, flexibility, reliability and multi-functionality, as well as decreasing size, weight and power consumption have driven the growth of these markets. IC advancements through improvements in semiconductor technology have contributed significantly to the increased performance of, and demand for, electronic systems and to the increasing proportion of IC cost as a portion of overall system cost. This technological progress occurs at an accelerated pace, while at the same time, the cost of electronic systems continues to decline.
Development of high-performance personal computers, requirements for higher network performance and increased levels of connectivity among different types of electronic devices drive the demand for new and varying types of high-speed, high-performance interface products to handle the transfer, routing, bridging and timing of digital and analog signals at high speeds with minimal loss of signal quality. High-speed signal transfer is essential to maximize the speed and bandwidth of the microprocessor, the memory and the LAN or WAN. High signal quality is equally essential for optimal balance between high data transmission rates and reliable system operation. Without high signal quality, transmission errors occur as bandwidth increases. The same market pressures imposed on microprocessors also drive the market requirements for interface products, and include higher speed, reduced power consumption, lower voltage operation, smaller size and higher levels of integration.
Our FCPs are devices incorporating quartz crystal resonators. Quartz crystals have the physical property such that, when stimulated electrically, they resonate at a precise and consistent frequency. A crystal oscillator, combining a quartz crystal and a simple electronic circuit, also generates a signal at a precise and consistent frequency. All types of crystal oscillators are clocks in the sense that they provide a frequency reference for various digital or analog electronic systems.
The continuing increase in electronic sophistication, as well as the penetration and proliferation of electronic products into new consumer and commercial applications, puts new demands on frequency control devices. This creates both technological challenges and new business opportunities for products offering faster speeds, higher stability relative to temperature, smaller surface-mountable packaging and lower unit cost.
Interface, switching, and timing products are used to enable higher system bandwidth in applications such as notebook computers, servers, network switches and routers, storage area networks, wireless base-stations, cell phones, digital cameras and digital TVs. We pioneer technology in each of these areas as demonstrated in the development and implementation of PCI Express technology across our interface, switching, bridging and timing product areas. PCI Express is a relatively new industry-standard serial protocol developed to offer higher bandwidth to and from the CPU chipset and peripherals like Ethernet, USB, video, and other types of connectivity devices. Almost every market segment and end product application is adopting PCI Express as the new high-speed signal path. As a serial protocol, PCI Express offers many times the bandwidth of PCI, the industry-standard parallel protocol that preceded PCI Express. PCI Express allows new cost-effective means to send high-speed signals longer distances for applications such as External PCI Express.
However, this expanded bandwidth comes at a price: signal quality and integrity becomes difficult to maintain as data rates routinely exceed multi-gigabits per second. The problems associated with signal quality that must be addressed by the interface ICs are magnified by increased speed at which these products must transfer, route and time electrical signals. The performance challenges presented to todays designers are significant: signals must transfer at high speed with low propagation delay, while signal degradation - such as noise, jitter, skew, and electromagnetic interference or EMI - must be minimal. In short, high-speed signal integrity is essential for state-of-the-art electronic systems to function reliably. Our signal conditioning products address these critical issues, and support the major serial high-speed protocols in use today.
High frequency and high data transfer rates are critical in the reliability of systems prevalent in the major market trends of today. Internet and high-performance network applications continue to push for more data bandwidth on system buses and across system boundaries. Computer and networking system clock frequencies continue to increase at a very rapid rate, shortening the time available to perform data transfers. While the data transfer rate has typically increased every few years, the continuing desire for higher system reliability with minimal system downtime creates increasing pressure to achieve lower data error rates. Increasing system-wide EMI emissions resulting from higher-frequency ICs compels system designers to develop and implement new ways to further reduce these emissions. These factors all increase the need for very high-speed, high performance, interface and switching products.
In server applications, we support higher system bandwidth by using PCI Express, PCI-X, PCI bridges, PCI Express Packet Switches and stand alone PHYsical layer products, as well as signal switches to isolate the systems memory modules from the bus when they are not being addressed. All major server OEMs have adopted PCI Express. PCI Express bridges and packet switches allow the transfer and switching of high speed data in and out of the CPU chipset to I/O end points such as Fiber Channel, Gb Ethernet and SAS. Manufacturers use other interface products to enable live-insertion of PCI boards (hot-swapping). This prevents system downtime when boards require replacement. We have similar products for hot-docking notebook computers and the majority of the notebook computers on the market today use our products.
In high-bandwidth systems data transfer needs to be synchronized, creating a high demand for timing products. Our timing and FCPs provide the precise timing signals needed to ensure reliable data transfer at high speeds in applications ranging from notebook computers to network switches. As systems continue to grow in processing power and complexity, the demand for these products will accelerate. The demand for higher precision will also continue to increase as timing margins shrink in higher bandwidth systems.
New high-end cell phone applications require low voltage, small packages and very low resistance to provide the highest fidelity sound. We address this market with our analog audio switch products that offer one of the smallest packages (TQFN), low resistance (0.4æ), low voltage (1.8V) and very low power consumption for extended battery life.
Todays mobile phones offer functions beyond simple voice communication, including PDAs, digital still cameras and digital media players. The additional features increase the interface needs in terms of connection pins. To provide more functions in a limited space, handsets increasingly use a shared-pin design through adoption of analog switches. Our low-resistance analog switches are well suited to address the needs of these shared-pin links.
Digital voice communications over the Internet provide cost-efficient long-distance voice transport. Voice Over Internet Protocol (VOIP) telephones enable users to gain access to voice communication from anywhere they have access to an IP data network. Further advances on this concept have led to the development of wireless gateways to VOIP. Many major wireless carriers are involved in wireless VOIP gateway projects. Our low resistance family of single Analog Mux & 2-Port switches are used in wireless VOIP phones to route signals. The wide voltage range and low standby current is suitable for current and next generation power efficient phone designs.
There is an increasing need to add multiple video components, such as DVD, PVR, VCR, STB/DVB, PCs and camcorders to a single video display unit, in order to provide true multimedia entertainment video networks. Multiple PC connections to the same network require multiplexing capability of the horizontal and vertical synchronous signals to the single display unit. Our 4:1 video muxes enable systems designers to add up to four video components with one PC in the network. Systems designers, using our increased 4:1 muxing capability and two additional ports can put multiple components, such as VCR, DVD, PVR, PC and others on video networks and switch vertical and horizontal synchronous signals.
Our video switch products address the need for higher video resolution, enable the integration of horizontal and vertical synchronous signals and accommodate switching of up to four video input streams with improved cross-talk and off-isolation features. These products address the DVI/HDMI, TMDS signal processing for PC Graphics and consumer video applications in the future.