BY ANTHONY CRUPI While the name certainly connotes disorder and deterioration, Entropic Communications seems to be trending in the opposite direction. Last week, the fabless semiconductor company — that’s not a typo; the term refers to a firm that focuses on the design and development of semiconductor chips rather than the actual manufacture of same — raised $29 million in a second round of VC funding and named Patrick Henry its new president and CEO. Along with a previous investor, Redpoint Ventures, Entropic enlisted tech companies like Intel, Cisco Systems, Comcast Interactive Capital, Motorola and Panasonic as new strategic backers. Entropic has deliberately kept details of its chip under wraps, but VP of marketing Michael Librizzi says that the company’s goal is to carve out a niche in the emerging home-networking arena. “We want to become the broadband backbone in the home,” Librizzi says. “For two years we’ve been developing a new link-layer technology that will allow people to distribute broadband multimedia throughout the home.” The Entropic chip, which will take up residence in a legacy DVR, will enable cable customers to ping video between every television set via existing coax. Librizzi says that the chip’s 200 Mbps transmission capacity will be sufficient to traffic multiple HD and SD feeds from the main set-top to up to ten other networked TVs. “The way we see the home today is that there are islands of digital home entertainment,” says Henry. “What our chip does is to take these separate islands and link them together into a holistic network.” The chip should be available for a first round of market trials by Q1 of 2004. Henry predicts that Entropic will “have boxes shipping in ’04, with a larger ramp-up in 2005.” Set-top manufacturers have already made their own inroads into networking broadband video. Dave Davies, director of strategy and business development at Scientific-Atlanta, says that the set-top vendor is working toward enlisting its Explorer 8000 DVR as a home server which will network with existing, thin-client set-tops. The multi-room DVR scheme “should be available next summer,” Davies says. Henry is quick to point out the fundamental differences in S-A’s networking approach. “From what I’ve seen, the cable operator would have to replace the active node at the point of entry to the home in order for the S-A system to work,” he says. What’s more, the Explorer 8000 “only provides data rates up to 40 Mbps, so it wouldn’t be able to handle HD,” Henry says. (That may be a moot point: S-A says it expects its Explorer 8000HD Home Entertainment server to ship somewhere in the December 2003 to March 2004 time frame.) If Entropic’s master plan falls together, the potential savings to MSOs would be significant, to say the very least. For example, the Explorer 8000 prices out at around $500. The networked mind-set is gradually gaining favor among customers with access to a host of digital content, says Dominic Ainscough, a senior analyst for the Yankee Group. “Consumer digital media libraries will continue to swell, particularly among consumers over age 25,” says Ainscough. Total home network penetration is expected to reach 18.5 million homes by 2007. Or as Librizzi puts it, “The stars are lining up. The reality is finally here.”

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