Optical components maker Parama Networks promised today that its new product, which the company is hailing as "the world’s first add/drop multiplexer on a chip," marks a new level of chip and system integration aimed at accelerating the commoditization of Sonet transport.

Parama’s 0.13-micron, 11.7-millimeter chips will contain eight framers on the tributary side, each software-configurable as either an OC-3, OC-12, OC- 48 or an OC-192 port. On the line side, two framers will be configurable as either OC-192s or OC-768s (the latter mainly intended for use as quad OC-192 lines to other cards). One chip will also contain a 40-Gb/s crossconnect; another will instead contain a 160-Gb/s crossconnect.

Parama claims the new approach will be one third the price of existing technologies, consume one fifth the power and feature three times the density of competing chips.

In card form, a single 8-inch by 6-inch Parama card will deliver the same OC-192 ADM capabilities that Cisco’s 15454 takes an entire shelf to do today, said Parama CEO Hemant Bheda.

"That card has 8 drop ports, for a total of 20 Gb/s of drop, full cross-connect across all the ports, and two redundant 10-Gb/s interfaces to the backplane," added Parama’s marketing director Scott Wilkinson. "It’s everything you’d want in a OC-192 ADM on one little card."

Parama, which began life as a systems equipment manufacturer about three years ago, later switched to "fabless" (i.e., without in-house manufacturing) chip production. Its CEO, Bheda, is the erstwhile founder of Mediamatics, which produced a system-on-a-chip for the DVD industry and was acquired by National Semiconductor in 1997.

Bheda said Parama’s chip design represents a unique strategy of chip-building that is based more on carrier needs than chip economics. "If you talk to a silicon vendor, he’ll say, ‘Why would you build an OC-192 framer and use it for OC-48? You’re wasting silicon. You’re leaving money on the table,’" Bheda said. "But when you put it in the network, by allowing that flexibility, carriers will save a couple thousand dollars. Those are the kind of trade-offs you start to make if you start looking at the problem entirely from the chip all the way to how it gets used in the network."

That close relationship between chip vendor and carrier, though rare today, could become more common as silicon advancements open the door for greater chip integration, Bheda said, possibly shifting a great deal of influence from system vendors to chip vendors.

"In the PC industry, Intel used to supply microprocessors to the IBMs of the world, and the IBMs were distributing PCs," Bheda said. "IBM was controlling the architecture. When the technology grew to a certain point, it made more sense to put the entire system on a chip, and Intel starting controlling the architecture along with MicroSoft. Now the IBMs and the Dells of the world differentiate their products by providing service. We see similar things happening now in the transport industry as well."

Parama expects to announce its first design customer in the first quarter of this year (Parama already won the design contract in December, but hasn’t announced it yet, according to the company), and a North American system vendor should introduce a product including Parama’s chip in the third quarter, Bheda said. In 2005, the company will announce the availability of an OC-192 "ADM system kit."

Wilkinson expects the chips to be used first in wavelength-division multiplexing applications because of the simplicity of incorporating the chips there.

The product will be demonstrated at the Optical Fiber Communication conference in Los Angeles in February.