The semiconductor companies develop their VoIP products for a variety of different end-products from telecommunications equipment manufacturers and consumer electronics companies. One of the primary products telecom equipment companies offer are VoIP phones, both wired and wireless for the consumer. However, these companies also provide both access point and central office VoIP equipment.

Besides VoIP phones and analog terminal adapters, telecom companies are adapting modems, PBXs, gateways and router equipment for Internet voice connectivity and switching. The cable television communications network is also being adapted for voice communications. For that market, companies such as Texas Instruments and Mindspeed have developed chips and software that allow for voice based telephone calls over the cable television communications network. Yet to come are powerline modems, which offer VoIP capability.

The infrastructure of the telecom market that semiconductors sell their chips into is complex. Large VoIP service provides, such as Vonage, besides offering low-cost VoIP telephone services, also are involved in the qualification and development of telecom equipment, although often indirectly. For example, Texas Instruments, which has a long-standing relationship with Vonage, has developed telecom products with telecom equipment companies to ensure that the equipment will work over the Vonage network. Vonage is well-funded company, which has activated over 1 million VoIP lines. In 2005, it obtained $200 million in funding and may go public. A public offering at Vonage could bring large amounts of money into the VoIP market and greatly accelerate the adoption of VoIP in the consumer market.

It is often difficult to discern if a telecom company actually manufacturers telecom equipment. Often, the large telecom companies provide equipment through third parties. With both third party hardware and software, the large telecom companies will install complete networks at corporate campuses and other business institutions such as hotels – retrofitting them with everything from VoIP PBXs, switching equipment, phone terminals, and cabling.

Among the most notable telecom companies are Avaya, Nortel, Cisco Systems, Siemens, Vonage, Mitel and NEC. Others that have significant VoIP market shares include UTStarcom, and TCL Communications,. U.S. Robotics also has recently announced that it plans to enter the VoIP equipment market.

A definitive way to determine which telecom system companies actually manufacture systems based on chips is to look at VoIP customers of VoIP chip companies. Find below a listing of companies that have been reported as VoIP chip customers.

TABLE: VoIP Chip Companies and Their Customers

Agere Systems: Nortel, UTStarcom
Atmel: Cisco Systems, SENAO International
Audiocodes: Vonexus, Texas Instruments (Marketing Agreement)
Bridgco
Broadcom: Alpha Networks, Ambit Microsystems, Hitachi Communication Technologies, iCableSystem, Inter-Tel Incorporated, Iwatsu Electric , Moimstone, NEC Infrontia, Scientific-Atlanta, TCL Communications, Wistron Neweb.
Centillium: NETGEAR, Uniden America Corporation, UTStarcom (Agreement)
Conexant Systems: Aztech Systems, Pirelli Broadband Solutions
DSP Group: Westell Technologies
F3:
Freescale Semiconductor:
Fortemedia:
Fujitsu Microelectronics:
Infineon Technologies:
IXYS (Clare Division)
Legerity: Amrivox Ltd, ARRIS, VOCAL Technologies,
LSI Logic: SyChip
Marvell Technologies
Micro Linear: Uniden
MicroTune: ARRIS
Mindspeed: Harbour Networks, Huawei Technologies Co., Ltd , Siemens Communications Inc., Teleca, TelcoBridges, Vierling Communications GmbH, Viking Interworks
OctASIC
PMC-Sierra
Renasas Technology
SigmaTel
Silicon Laboratories: Huawei Technologies Co
SOC Technology GmbH: VOCAL Technologies
SMSC: VOCAL Technologies
Texas Instruments: 3Com, Alcatel, Arris, AudioCodes (agreement), Cisco Systems, Ericsson, General
Bandwidth, LG Electronics, Mitel, Motorola, Netgear, Nortel Networks, Pace, Quintum Technologies,
SBE, Siemens, Sonus Networks, Terayon, TCL Communications(Joint Development), Uniden America,
Viseon, VOCAL, Vtech
Tiger Jet
Transwitch
Voxelle
Wolfson Microelectronics

An examination of who the semiconductor companies are selling their products to can give also give one a good idea of whose got the VoIP phones, gateways, servers and access points. As well, it can help determine the positioning of chip companies with VoIP venders.

From the list above, it can be seen that Texas Instruments and Broadcom have reported the most customer accounts over the last year, which lends credence to recent market research reports that indicate Texas Instruments and Broadcom have the major percentages of market share. The increased customer activity at Broadcom is also indicative of improved market share at that company.

System Manufacturer Market Data

ARRIS is a leader in VoIP cable modem market, which include its Touchtone series embedded multimedia terminal adapters. In June 2005, ARRIS reported that it had shipped over one million of the units. During the first quarter of 2005, the company had shipped over 334,000 of the units.

Avaya Inc., with first quarter 2005 revenue of over $1.2 billion, reports that it designs, builds and manages communications networks for over 1 million businesses, which includes hotels. Avaya does offer equipment and has worked with integrated circuit companies, such as Intel and Broadcom, for its product development efforts.

Huawei Technologies Co., Ltd. is another large telecom company, but it focuses on China’s telecom market. The company designs, develops and manufactures telecom equipment. The company employs over 22,000 people and had sales in the order of RMB31.7 billion in 2003. There are about 8 RMB to the dollar.

Nortel Networks has a vast VoIP collaboration program that involves over 120 companies. Companies that are involved in the program to further the adoption of SIP includes semiconductor companies and a wide range of telecom equipment companies.

Table: VOIP Equipment Companies

3Com
Alcatel
Alpha Networks
Ambit Microsystems
Amrivox Ltd
ARRIS (NASDAQ:ARRS)
Arris
AudioCodes
Avaya
Aztech Systems
Cisco Systems
Ericsson
General Bandwidth
Hitachi Communication Technologies
Huawei Technologies Co
ICableSystem
Inter-Tel Incorporated
Iwatsu Electric
LG Electronics
Mitel
Moimstone
Motorola
NEC Infrontia Corporation
NETGEAR
Netgear
Nortel Networks
Pace
Pirelli Broadband Solutions
Quintum Technologies
SBE
Scientific-Atlanta
SENAO International
Shoretel
Siemens Communications.
Sonus Networks
SyChip
TCL Communications
Teleca
Terayon
Uniden America Corporation
UTStarcom
Viseon
VOCAL Technologies
Vonexus
Vtech
Westell Technologies
Wistron Neweb