Conexant’s Cable Modem Design Falters

Conexant Systems Inc.’s much-touted cable modem blueprint did not win certification Thursday from by an industry standards group.

Industry analysts said the news comes as a minor embarrassment for the Newport Beach-based chip maker, whose staff members had voiced confidence last week that it would be the first technology company to pass Cable Television Laboratories’ rigorous testing process on its first try. CableLabs officials declined to comment on why Conexant’s cable-modem reference design did not pass.

Without CableLabs’ stamp of approval, modem manufacturers won’t use Conexant’s technical designs inside their products aimed at the U.S. market, analysts said. The global cable-modem market, led by the U.S., is booming. The number of units shipped more than doubled this year--to 2 million--and is expected to jump another 83% in 2000.

Rival Broadcom Corp. has dominated this market so far because it was the first with a full chip-set for these modems--as well as several complete technology reference designs for cable modems and other related devices--that met the standards set by CableLabs. This edge has helped the company seal a slew of deals to supply chips to manufacturers including giant General Instrument Corp.

That gap is expected to grow today. Irvine-based Broadcom will unveil its next-generation cable-modem chip, which promises faster and better delivery of video, voice and data services to home computers, according to sources.

Broadcom’s latest chip merges several features normally handled by separate components inside the cable modem box.

More importantly, say sources, the chip works with the latest industry standards--a full generation ahead of the standard that Conexant is seeking for its current design.

Broadcom officials declined to comment Thursday.

Conexant, meanwhile, must re-file its design to CableLabs in late January, when the standards group will again accept submissions.

Conexant shares lost $2.19, to $71.56, Thursday in Nasdaq trading.