LAN cards & adapters

	The WS-UL220G from mainland China's Winstars is a USB 2.0 Gigabit Ethernet adapter that supports MDIX.

Slow-moving inventory and weakening demand push suppliers to upgrade products or leave the line.

China companies mostly provide PCI Ethernet interface cards for desktop PCs. Many are veering away from the PCI Express LAN market due to slow demand and the cost difference between the former and PCI LAN cards. The majority has continued to focus on PCI LAN cards.

Meanwhile, LAN adapters are now offered in USB types. Suppliers said these products have stable demand, especially in the notebook PC segment.

Even so, China’s supply of LAN cards and adapters is moving at a slow pace amid diminishing demand and the threat from motherboards with embedded LAN chips. Demand in the WLAN card sector is likewise on a decline, as the market moves toward modules integrated into notebook PCs and game consoles. Most makers do not see substantial growth in production, and export volumes are expected to dip this year.

Many suppliers, however, will continue to develop
LAN cards and adapters targeted at emerging markets, including northern Europe, the Asia-Pacific region and the Middle East.

Most companies are making adjustments in output and exports to deal with the worldwide economic downturn. As part of this, more makers are shifting from low-end production to midrange and high-end models, where profit margins are better.

LAN cards and adapters from China are compatible with PCI and USB. Low-end LAN cards support full-duplex 10/100Mbps and plug-and-play. Units have a PCI clock, 16.75 to 40MHz, ACPI and PCI power management, wake-on-LAN function and remote wake-up and full-duplex flow control via IEEE 802.3x.

B-Link Electronic Ltd offers low-end models but plans to highlight its midrange line in coming months. The company is targeting the release of one new product quarterly. Most midrange units will have customized designs that emphasize the card structure.

With only a few suppliers engaged in the line, B-Link is motivated to improve the quality of LAN cards it offers. Currently, the company employs four engineers handling product development.

Full River (Hong Kong) Ltd offers three types of LAN cards: PCI, SATA and Gigabit LAN. The company released its first SATA LAN models in 2H07. It plans to shift focus to developing wireless networking devices, which is the current trend. Even so, LAN cards and adapters will remain as the company’s value-added service products.

Makers of LAN adapters are introducing products with an enhanced transmission range and speed. Earlier models provide 10 and 100Mbps N-way and auto-negotiation operation. New releases support up to 1Gbps data rate.

Midrange LAN card adapters are expected to be mainstream in 2009. These include a USB 1.1 or 2.0 port, fast Ethernet MAC, physical chip and transceiver in one chip. They support 10 to 100Mbps N-way auto-negotiation operation and 12Mbps full-speed USB.

Gigabit Ethernet LAN adapters are predicted to be popular as well. The models are equipped with full- and high-speed USB with bus power capability. They are compatible with IEEE 802.3, 802.3u and 802.3ab. The units support half- and full-duplex operation in fast Ethernet and packets of up to 9KB.

From producing LAN cards, Winstars shifted to providing midrange and high-end LAN adapters. The company launched Gigabit Ethernet LAN adapters in 3Q08 and claims to be the first supplier in Shenzhen to release USB 2.0 Gigabit Ethernet LAN adapters.

This year, Winstars plans to release products with various industrial designs, as well as develop other electronic devices with built-in LAN adapters.

The majority of suppliers provide OEM services and offer an array of LAN cards and adapters.

Slowing demand and thinning profits, however, pushed about 70 of the 100 companies engaged in the line to close, go upmarket or shift to other products in 1Q08.

B-Link, which mainly exports low-end and midrange LAN cards and adapters, is increasing its output of midrange units by at least 10 percent this year.

The company is also expanding its monthly capacity from 100,000 to 130,000 units. Nearly 90 percent of output will be exported.

LAN cards and adapters account for almost 20 percent of B-Link’s revenue from all products.

Another interviewed supplier, Winstars Technology Ltd, is developing midrange and high-end LAN cards and adapters.

The products are targeted at customers in Southeast Asia and the Middle East.
The company is currently making 50,000 units against a monthly production capacity of 100,000.

Taiwan’s supply yields 10/100 and 10/100/1000 Gigabit wired LAN cards for notebook and desktop PCs that support PCI, PCI Express, PCMCIA (CardBus) and USB adapters. Wired LAN cards, however, are considered secondary products because of the growing supply of motherboards integrating wired modules.

Most companies now provide WLAN cards that comply with 802.11a,
802.11b/g, 802.11 Super G and 802.11n standards. LAN cards and adapters adopt 802.11n and integrate MIMO technology with 1T2R, 2T2R, 2T3R and 3T3R. The WLAN cards support PCMCIA, PCI, PCI Express, ExpressCard or mini PCI Express card and USB adapters. Makers predict the growing adoption of ExpressCard in laptops will eventually replace the CardBus interface. USB adapters, which can be used for both notebook and desktop PCs, are also promising.

Taiwan is a prime sourcing hub for WLAN NIC, providing 89 percent of world output. According to the Market Intelligence & Consulting Institute, shipments of WLAN NICs reached 191.14 million units in 2008 and will exceed 238.93 million units in 2009. Export value is placed at $2.58 billion and forecast to grow to $2.87 billion during the same period.

The key growth driver will be the continued adoption of 802.11n technology. Although NICs still dominate 802.11n shipments, suppliers agree that 802.11n WLAN cards will become mainstream in emerging markets, particularly Asia and the Middle East.

Taiwan has 30 to 40 makers that offer WLAN cards and adapters. The supplier base is composed of large-scale companies and SMEs. Most provide OEM, ODM and off-brand products. Some, including AsusTek Computer and D-Link Corp., promote their own-brand WLAN products.

Suppliers source IC solutions from Atheros, Broadcom, Marvell, Texas Instruments and Ralink. They said the declining cost of smaller chipsets will tighten price competition.

Taiwan’s Topology Research Institute indicates that 65nm SoCs cost 20 to 30 percent less than 90nm ICs. TRI predicts that 802.11n chipsets will drop from $7 in 1Q09 to $5 in 4Q09. The institute added that 802.11n will become more popular in the market when the chipset cost falls below $7.

USB LAN adapters that support 802.11n are expected to fall below $18 from last year’s $20. NICs or 802.11n LAN cards are also predicted to list at $18. Units that integrate 802.11b/g will be quoted at $10 to $12.