April 1997
Ownership:Privately held

To be the leader of consumer oriented Digital Subscriber Line semiconductor technology.

Centillium is a fabless semiconductor company developing consumer-oriented Digital Subscriber Line (DSL) solutions for manufacturers of telecommunications equipment. These solutions allow consumers and businesses to use existing copper telephone lines to transmit and receive data up to twenty times faster than today's fastest analog modems.

Centillium has developed a G.lite based DSL technology that is as affordable and easy to deploy as 56K-modem technology in both central office (CO) and customer premises equipment (CPE). The Company believes its DSL technology will enable telephone companies and other service providers to offer high-speed digital subscriber lines broadly to consumers and businesses.

Centillium was founded in April 1997 by a group of Silicon Valley veterans led by the well-known entrepreneur Kamran Elahian. Over the past 20 years, Elahian has co-founded numerous successful technology companies, including CAE Systems, Cirrus Logic, and Neomagic.

Market Opportunity
Centillium addresses a very broad market opportunity, namely the growing need for bandwidth. The number of households worldwide connected to the Internet is expected to triple from 50 million in 1997 to 150 million in 2000 (source: Morgan Stanley, Internet Report). Similarly, the value of goods and services traded over the global Internet is expected to multiply from $8 billion in 1997 to over $327 billion in 2002 (source: Forrester Research).

Despite these projections for widespread adoption of the Internet, limited bandwidth is still a major headache for most consumers and business users. Traditional analog modems, the devices that enable computers to communicate over telephone lines, have not kept pace with the needs of users. In fact, 40 percent of online users switch up to higher speed modems products within the first year of their introduction (source: UBS Securities). Phone companies already are rebuilding their networks for fiber cabling, but wiring the entire country for fiber is a costly and slow process. According to published studies, telcos can install new fiber cabling at 7 percent of their installed access line base in any given year. Because demand for access lines grows at about 3 percent per year, the net upgrade to the network is about 4 percent per year, which means fiber will not reach many customers for 20 to 25 years.

One potential solution to the bandwidth problem is DSL technology. Conventional voice traffic and dial-up data over analog phone lines plain old telephone service (POTS)  currently uses only less than 1 percent of the bandwidth available of the copper wiring. DSL technology takes advantage of the unused bandwidth to transmit digital data at high speeds.

The various “flavors” of DSL technology include Asymmetric DSL (ADSL), Symmetrical DSL (SDSL), High-bit-rate DSL (HDSL), Very-high-bit-rate DSL (VDSL), and Rate Adaptive DSL (RADSL). All of these DSL technologies use intelligent devices similar to network cards at each end of twisted-pair copper wire already in place to transmit and receive data at high speeds.

Despite the benefits of DSL technology, carriers and ISPs have been reluctant to rollout digital subscriber lines for three main reasons:

  1. DSL technology is challenging to deploy. DSL technologies have required difficult installation and network engineering processes. Also, ISP and telco engineers must make sure that copper lines are “clean” and the distance between the central office and the end user does not exceed the limit.

  2. DSL line cards consume high amounts of power. High power consumption generates heat, which prevents carriers from putting large numbers of DSL line cards into a single central office rack. The resulting racks have low port densities and high costs per port.

  3. DSL technology requires new modem-like devices on both the user and the phone company end of the line. Today, these devices are quite expensive, costing anywhere from $900 to $1,500 per line.

Technology and Products
Centillium has developed a consumer-oriented G.lite based DSL technology which addresses many of the problems that have hindered the widespread deployment of digital subscriber lines.

  1. On the central-office side of the DSL equation, products based on Centillium's G.lite DSL chip sets will be as easy to deploy as POTS equipment. Carriers simply pull existing line cards and replace them with true plug-and-play DSL cards. Adaptive line drive technology enables telcos to deploy DSL products on copper lines with varying conditions, further reducing installation and network engineering efforts.

  2. These line cards consume very low amounts of power, enabling telephone companies to deploy line cards with high port densities and low cost per port.

  3. Centillium’s DSL technology lowers the cost of DSL equipment needed by service providers to the point where mass deployment of DSL by carriers and ISPs becomes economically viable. On the customer equipment side of the DSL equation, Centillium’s DSL technology is price competitive with 56K analog modems and is as easy to install.

Later in 1998, Centillium plans to introduce a DSL chip set based on the ITU G.lite specification.

Target Customers
Centillium will market its chip set products directly to manufacturers of central office equipment such as line cards for central office switches, digital loop carriers and access concentrators, as well as makers of end-user modems.

Core Competencies
Centillium is highly focused on developing the best chip set solutions for the DSL equipment market. It brings several core competencies to the DSL market, making it an attractive business partner for manufacturers of telecommunications equipment.

  1. DSP Technology.  Centillium’s digital signal processing technology provides very high levels of performance because it is optimized specifically for DSL applications. The Company believes that its DSP technology is currently one full generation ahead of the competition.

  2. Integration.  Centillium has developed a highly integrated “line-card-on-a-chip”  that contains the most DSL functionality found on a single chip today. This enables customers to create high density line cards that are cost effective and low power.

  3. Line Card Design Services  Most chip set companies provide equipment manufacturers with reference designs, but Centillium goes a step further by offering a value-added service group that works hand-in-hand with manufacturers on design issues. Through this service, Centillium focuses on understanding the needs equipment makers and helping speed their time-to-market with products.

To date, Centillium has raised over $20 million from a number of investors, including U.S. Venture Partners, Walden International Ventures, Vertex Ventures, VentureStar, Korea Technology Banking, Mitsubishi Electric and Sumitomo Electric. Centillium is well funded to meet its technical and marketing objectives.

Centillium was founded by a small group of entrepreneurs with a powerful track record of success. The founders included Kamran Elahian, Shahin Hedayat, Faraj Aalaei, Tony O’Toole, and Babu Mandava, all of whom are executives of the Company today.