Event Summary
In April, Broadcom Corporation (NASDAQ:BRCM) announced the second-generation Gigabit Ethernet Transceiver, a product that allows companies to leverage their existing CAT 5 infrastructure. The significance of the Broadcom BCM5401 is that it will allow vendors to manufacture network equipment that utilizes existing wiring infrastructure, significantly reducing the cost of extending Gigabit Ethernet to the desktop environment.
Market Impact
The Broadcom BCM5401 1000Base-T Transceiver will have a significant market impact because Ethernet switching vendors will not have to change the device form factor they are currently manufacturing. This will allow them to keep engineering costs to a minimum in the area of design and manufacturing, with the best example of this being the Data Closet stackable market.
This transceiver will allow companies to leverage the technology built into the chip set by having a mixture of 10, 100, and 1000Base-T clients residing on the same piece of hardware using existing Category 5 cabling. Before development of this chip set, the only way to deliver Gigabit speeds was to run fiber optic cabling to the area or desktop where this type of performance was desired. This product will allow companies to receive a 10 times performance increase to their existing network without having to upgrade their infrastructure to either category 5E cabling or fiber optic.
The deployment of this technology will depend on both successful vendor testing and which vendors will receive this chip set for testing. If the top three vendors in the Ethernet switching and adapter market receive this chip set you could see Gigabit Ethernet to the desktop over standard Category 5 cabling by either late third quarter or early fourth quarter.
User Recommendations
Any company planning to upgrade its network in the third quarter of this year should wait to see the vendor impact from this gigabit transceiver. If vendor testing is successful, there will be a variety of options available, ranging from reduced pricing in the 10/100MB Ethernet switch market to a new line of products offering 1000MB Ethernet to the desktop. The visibility of seeing this in 2000 is greater than 60 %, considering that testing of the Broadcom 5400 pure 1000Base-T transceiver had no problems.