Corrections or additions?

This article by Michele Alperin was prepared for the April 24,

2002 edition of U.S. 1 Newspaper. All rights reserved.

Life in the Fast Lane

In a world where technology leapfrogs into the future,

Milton Chang, president and founder of Systems on Silicon Inc., is

betting on evolution. His start-up chip design company in Monmouth

Junction is developing a chip for a device that integrates network

management for broadband applications into a single device. "Our

view is that networks will evolve versus changing completely at one

shot," says Chang. Consequently, his product will enable the

combination

of traditional and next-generation applications.

While Chang was engineering director for Intec Systems in Manalapan,

which he joined in 1999, he "started thinking about how the

Internet

has changed the life of every person." At the same time, he

realized

that although much effort was being devoted to modernizing the

Internet’s

core network infrastructure, few things were being developed to

improve

access networks. "So I decided to do something about it,"

he remembers. He founded Systems on Silicon Inc. (SOSi) to design

chips for the access networks that connect subscribers with their

telecommunication service providers.

His company has just been sold to Chang’s former employer, TranSwitch

Corporation (TXCC), based in Shelton, Connecticut. TranSwitch, which

owned two percent of SOSi, develops multi service access solutions

for the communications semiconductor industry. It paid the equivalent

of $2.4 million in cash for the remaining 98 percent, $900,000

directly

and $1.5 million in debt assumption. SOSi will continue to operate

at Metroplex on Cornwall Drive as a wholly owned subsidiary of

TranSwitch.

"We produce the brain for the next generation of broadband network

access equipment," says Chang. The Systems on Silicon chip aims

to utilize the information-carrying capabilities of broadband networks

to enable the consolidation of data, voice, and video applications

via a single delivery system. "Right now," explains Chang,

"because of an evolving telecommunications infrastructure, people

are deploying new services, like Voice over Packet (VoP)."

The new device will enable internet service providers to add new

services,

like videoconferencing, virtual private networks, and Voice over

Packet,

quickly and reliably, without having to install additional expensive

equipment. The overall market for this equipment is expected to grow

to $2.7 billion by 2005.

Many companies are interested in adding VoP capability, because it

is more flexible and can be less expensive than traditional telephone.

VoP enables users to send voice information in discrete packets over

networks like the Internet or over DSL lines. But high quality and

reliable voice transmission is not always available from Internet

service providers, and the device using the Systems on Silicon chip,

Chang promises, will offer voice quality higher than what the existing

network equipment can provide.

VoP is also more flexible than traditional phone service; for example,

it allows users to make phone calls through web pages and, with the

addition of a camera mounted on the computer screen, can provide video

conferencing. Chang believes VoP will enable companies to better serve

their customers. "If you purchase a product and have questions

about installation or service for a home appliance," explains

Chang, "you could click to the vendor’s website and communicate

with a customer service representative." The advantage over a

traditional phone call is that the product could be demonstrated

online

during the conversation.

Because of Chang’s commitment to evolution over revolution, his chip

will enable a user to choose either traditional telephone service

or VoP. He understands that not everyone will embrace VoP immediately,

because people value the reliability provided by the existing phone

network. The device powered by his chip will also support migration

from traditional service to VoP.

Systems on Silicon targets access equipment for both multi-tenant

units, in which telecommunication systems are brought into a large

building, and carrier-class direct access for a single subscriber

in a single building, like a travel agent or a doctor’s office.

Milton Chang’s academic background is in electrical engineering; he

received a B.S from Chengkung University in Taiwan in 1984 and a Ph.D.

from Michigan State in 1992. He spent three years with Siemens in

Taiwan as a chip designer, moving in 1995 to TranSwitch in

Connecticut,

as manager of Internet VLSI, and landing in 1999 as engineering

director

for Intec Systems in Manalapan.

When Chang started Systems on Silicon in 2000, he brought in friends

who were excited about his vision of improving connections between

subscribers and Internet service companies. He used his own money

at first, then raised a seed investment from family and friends.

Finally,

he talked to institutional investors and closed Series A financing

with his former employer, TranSwitch, in 2001. He also raised funds

from a venture capital company, Global Technology Venture, based in

Boston.

Systems on Silicon’s chip is still in the R & D stage but is expected

to come out at the end of 2002. Even though the product is not

complete,

says Chang, "we have customers signing up." Since its founding

in early 2000, the company has grown from four to 12 people, most

of them engineers. In that time, it has also moved from the basement

of one of the founders to a smaller office among doctors and dentists

and finally to a more appropriate building for a promising start up.

Now that Chang has sold the firm to TranSwitch, he plans to hire

additional

researchers and upgrade the furnishings.

The current voice quality of VoP telephony is not necessarily good,

and video images may be choppy, but as the Internet’s infrastructure

develops, Chang sees his products working with those technologies

to improve quality.

Chang plans to stay focused on the company’s current application,

but he foresees future applications that will address developing

market

needs. "We are in a continuous process of reinventing

ourselves,"

he says.

— Michele Alperin

Systems on Silicon, 1100 Cornwall Drive, Suite

10, Monmouth Junction 08852. Milton Chang. 732-398-0048; fax,

732-398-0552.

Www.sosi2000.com


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