Passave - now owned by PMC-Sierra (PMCS) - rolled up virtually all of the Japanese market for FTTH semiconductors at the expense of Teknovus and Centillium (CTLM). But the massive broadband greenfield opportunity in China is a breakpoint that should allow a second GE-PON silicon provider to secure share. Teknovus realizes that they need to capitalize on this opportunity.
The playing field in China is leveled because they are implementing an enhanced version of the IEEE 802.3ah spec. This activity has been totally overlooked in the mainstream media and investment community, and is something I discussed in The Future of FTTH in China - Part IV. Teknovus is the first company to announce a production device that meets the requirements laid out during this conference by China Telecom.
It’s been a source of frustration to me that Centillium (CTLM) continues to put its energy into penetrating Japan and ignoring the rollout of FTTH services in markets where no incumbent chipset and equipment supplier exists. I wrote about Centillium before, and was shocked that they didn’t bother to show up at the China Telecom sponsored working sessions. Commentary from the company in July and on subsequent conference calls indicated all effort continues to be focused in Japan.
I continue to believe that 10 years from now, the GE-PON will be the dominant FTTH standard based on my assumption it will dominate in Asia and be the next generation access standard for the 2.5 Billion people that live there. Teknovus appears to realize this and is focusing their energy on the big opportunity rather than divide their efforts chasing both GE-PON and the ITU standard G-PON opportunities.
Full Disclosure - I am long CTLM.