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What are the Centillium Communications cornerstones?

Centillium Communications' business strategy is built upon three cornerstones:

• Providing broadband access solutions for all market segments
• Inventing new technologies and driving them through standards adoption
  
• Consistently delivering systems with the highest level of value

By delivering on these objectives, Centillium strengthens an already dominant position in the worldwide broadband communications market. Expertise in communication protocols, design of programmable Digital-Signal Processors, algorithms, analog and mixed-signal electronics, and system expertise has enabled Centillium to deliver market-leading solutions.

In fact, of the 300 employees at Centillium at the end of fourth quarter 2002, most have advanced degrees and nearly 10% are at the PhD level. Many of Centillium's experts have backgrounds working in network system design firms (large and small) in addition to semiconductor companies, and others have worked at service providers. The management team has more than 100 years of combined experience in the communications semiconductor or high-tech industries, completing the combination of just the right experience to push innovation into motion.

How large is the broadband communications market?

According to Dell'Oro, by the end of the fourth quarter 2002, there were 33 million DSL lines in service globally. Dell'Oro predicts the worldwide DSL market to grow to more than 134 million lines by 4th quarter 2007.

Examining the Centillium Communications cornerstones

Cornerstone #1: Providing Broadband Access Solutions for All Market Segments
The broadband access market can be divided into three major segments: residential consumers, businesses and multi-tenant building customers. These end user segments require a variety of broadband applications, beginning with high-speed Internet access. In fact, according to IDC, by 2003 30% of the "online" households will be using broadband services for Internet access.

Centillium's market-leading solutions for DSL allow consumers and small businesses to use existing copper telephone lines to transmit and receive data up to 100 times faster than today's fastest analog modems. Centillium markets its products directly to manufacturers of telecommunication equipment such as central-office switches, digital-loop carriers, access concentrators, gateways, residential and business gateways, customer premises equipment, as well as PC OEMs.

Equipment companies are using Centillium's Entropia™ VoP chip for development of next generation digital loop carriers and collapsed central office equipment. These pieces of equipment are intended to enhance currently existing networks by providing packet voice service capability to customers already served off of digital loop carriers. The equipment will also provide voice services to customers of competitive local exchange carriers that have limited space and want the most flexibility for the investment made in network equipment. Large incumbent carriers can benefit by integrating existing networks with newer, more efficient packet-based networks that cost-effectively transport voice services.

It is Centillium's vision to leverage the pipe into the home or businesses by distributing the bandwidth throughout to enable high-speed Internet, packet voice, video, audio and other multi-media applications. The idea is to enable multiple users to share the bandwidth through one piece of integrated equipment.

Cornerstone #2: Inventing New Technologies and Driving Them Through Standards Adoption
Centillium is continually inventing better ways to implement communications technologies. In the DSL market, Centillium's innovative technology is the basis for equipment used in Japan by NTT and other carriers. This technology has enabled Centillium to win a dominant position in the Japanese ADSL chipset market. Centillium's leading designs are the basis for many other equipment manufacturers' DSL products in the U.S., Canada and Europe in addition to Asia. Here is a snapshot of other market-leading innovations Centillium has brought to the market:

• First to provide a multi-mode full rate and G.lite ADSL chipset for Central Office applications with less than 1 Watt of power consumption per port
  
• First to enable technology supporting ADSL in Japan
  
• First to provide multi-mode DSL chipset
  
• First to introduce a VoP solution supporting 336 voice channels with just one chip
  
• First • First to introduce the most integrated & feature-rich ADSL CPE chipset delivering 12Mbps downstream rates
  
• First • First to enable deployment of 12Mbps ADSL & long-reach ADSL (eXtremeDSL technology) for Japan market

One of these firsts, the introduction of the Entropia VoP family of chips, signaled Centillium's groundbreaking entry into the packetized voice market. Centillium continues to build upon this initial VoP product offering by providing solutions which bridge the circuit switched networks of today to the packet-based networks of the future.

Centillium's newest product line addresses the premises networking market. The intention of Centillium's founders has always been to support the broadband communications market by providing the technology not only to support data and VoP services, but also to provide chipsets for building networking products for residences and businesses. The beginning of that vision was achieved when Centillium Communications acquired Avio Digital, a leading provider of home networking technology, in June of 2000.

Cornerstone #3: Consistently Delivering Systems with the Highest Level Of Value
Centillium Communications has committed to provide its customers with chipset solutions with the highest port density, lowest power consumption, and best performance in the market. Centillium is highly focused on developing the most integrated chipset solutions for the communications and data equipment market. The Company brings several core competencies that ensure customers will receive the highest level of value in the DSL market, making it an attractive business partner for manufacturers of telecommunications equipment.

DSP technology - Centillium's proprietary digital signal processing technology provides very high levels of performance because it is optimized specifically for communication applications.

Systems engineering/applications - Centillium takes the perspective of the service provider and the equipment manufacturer when designing its products to fully support the end-to-end business models of service providers and equipment manufacturers.

Complete system team - Centillium has in-house expertise in analog/mixed signal, digital design, DSP algorithms, and protocols/system applications.

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.

What are the details of Centillium's products?
Centillium's DSL solutions allow consumers and businesses to use existing copper telephone lines to transmit and receive data up to 1000 times faster than today's fastest analog modems. Centillium markets products directly to manufacturers of telecommunication equipment including central-office switches, digital-loop carriers, access concentrators, gateways, customer premises equipment, and PC Original Equipment Manufacturers (OEMs).

Centillium Communications' Central Office products and CPE products support full rate single spectrum ADSL (ITU-T G.dmt & G.lite) for the design for the global markets.:

The innovative VoP solutions provide carriers an alternative for integrating current circuit-switched voice networks with newer, packet-based networks. Carriers can benefit from transporting voice in packets, a more efficient method for voice transmission.

Centillium's VoP products support VoATM (including AAL1, AAL2, and AAL5) and IP. The Entropia products are available for using in the following configurations:

• 64/48/32/24 channels IADs, iPBXs, small gateways
  
• 336/256 channels Gateways, DLCs, NGDLCs, DSLAMS

The newest product line addresses the premises networking market. It is Centillium's vision to leverage the pipe into the home or businesses (DSL) by distributing the bandwidth throughout, enabling high-speed Internet, packet voice, video, audio and other multi-media applications.