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Rockwell to make cable modem chipsets

Cable modem technology got a shot in the arm today as modem powerhouse Rockwell announced plans to manufacture chips for cable modems.

    Cable modem technology got a shot in the arm today as modem powerhouse Rockwell Semiconductor Systems announced that it plans to manufacture chips for cable modems.

    As companies and consumers demand faster connections to the Internet, more and more modem manufacturers are regarding cable technology as the logical next step, said a Rockwell executive.

    "Modem technology ultimately hit some roadblocks and you have to move into other areas in order to hit higher bandwidth feeds," said Jay Kshatri, director of broadband modems at Rockwell. "Cable modems are the likely target."

    Already 3Com, Motorola and Samsung have indicated plans to jump into the cable modem arena, the latter taking the plunge earlier today. ((See related story) 3Com and broadband network supplier Lightwaves have agreed to purchase the chips, as have a number of other companies, Kshatri said.

    Promising speeds at least 300 times faster than phone-line modems now offer, cable technology is hailed by some as the next big thing. Will Strauss, president of Forward Concepts, which follows the modem market, predicts that sales of cable modems will mushroom in the next few years, reaching 6 million units by 2000 and 14 million by 2002.

    "It's going to be a fairly sizable market," Strauss said. "We're very bullish on it."

    The technology is attractive to consumers because some 90 percent of homes in the U.S. already are equipped to receive cable. Strauss added that the research is not lost on Rockwell, by far the dominant supplier of modem chips.

    "Rockwell has been the 800-pound gorilla in the traditional modem market," said Strauss. The announcement "makes me think they want to stay the primary modem chip supplier of all kinds of modems."

    Competition remains light at the moment, with only a few, relatively small companies now supplying cable modem technology. Among them are Broadcom and Stanford Telecom, both in California's Silicon Valley. Other potential competitors include Lucent Technologies and Motorola.

    Some, like Motorola, are also working on another high-speed Internet connection technology collectively known as XDSL, which uses existing telephone lines to deliver data. Last April, Rockwell announced the formation of a networking division that includes Brooktree, a Rockwell subsidiary that produces XDSL modems.