FRANCISCO — With $17 million in venture funding in its pocket,
Kenet Inc. is preparing to attack the market for high-speed
analog-to-digital converters with technology based on research
at MIT's Lincoln Labs.
Kenet's technology team has crafted a formula to produce CMOS
data converters with ultrahigh sampling rates and ultralow power
consumption. The company's backers believe Kenet has what it
takes to compete with the likes of Analog Devices, Philips
Semiconductors and Texas Instruments in the portable consumer
products area. Reps are already visiting potential customers in
Japan and South Korea; Kenet's first products are to be formally
unveiled this fall.
The Reading, Mass., company is targeting the market for
high-performance A/D converters-specifically, 10-, 12- and
16-bit devices with sampling rates in excess of 100 Msamples/second.
This segment of the data converter market will ring up $200
million to $250 million in total sales this year, according to
Kenet estimates based on forecasts by DataBeans Inc. (Reno,
Nev.). The high-speed data converter segment, which includes D/A
converters as well as A/Ds, is expected to reach $1 billion by
2008, said Gerhard Sollner, the MIT scientist who now serves as
Kenet's president and chief executive officer.
The market for signal-conditioning circuits, the analog front
ends of which Kenet also intends to produce, will total $800
million in 2005, Sollner added.
CEO Michael Anthony, also from MIT's Lincoln Labs, believes
Kenet can build those high-sampling-rate devices with
startlingly low power consumption. That combination would allow
high-speed direct-conversion devices to be used in portable
handheld systems like cell phones, cameras, wireless Internet
browsers and digital multimedia receivers.
While Kenet has declined to reveal its technology prior to
the formal launch of its first products, the company was founded
in August 2001 with the aim of commercializing an MIT
development called FemtoCharge CMOS technology. Lincoln Labs was
engaged in military research at the time, and FemtoCharge CMOS
is still so secret that the term yields nothing on a Google
A recently completed Defense Advanced Research Projects
Agency contract established the immunity of Kenet's analog
circuitry to CMOS substrate noise, CTO Anthony acknowledged, but
he refused to provide more details.
Responding to speculation that Kenet's technology might
represent some form of nanoscale current weighting, Anthony said
only that the technology was scalable with CMOS geometries.
Common CMOS analog complaints-that tighter line widths and lower
voltages incur losses of analog headroom and dynamic range-do
not apply here, he insisted. This means that Kenet's A/D
converters and analog front ends could be integrated with CMOS
digital ASICs, conceivably with 90-nanometer process technology.
Despite the secrecy, potential customers briefed under
nondisclosure agreements are getting excited, Sollner said.
"When we tell people our specs, they are first incredulous," he
said. "But then they quickly become converts."
Kenet's marketing personnel, some of whom have launched
products at Analog Devices and Globespan, have been visiting
potential customers overseas and have had a very good reception,
Whether a laboratory-oriented startup has the wherewithal to
go against established commercial players in the competitive
consumer and communications markets is still an open question.
Medical scanners and imagers may be more accepting of
prepackaged parts, with somewhat higher prices, than consumer
products. But competitors are pursuing those markets as well.
The startup company collected $7 million in April 2002 and
$10 million this May from venture capitalists like Venrock
Associates, Kopin Corp., the CP Group and Oak Investment
Partners. "Kenet is ready to go to market," said Iftikar Ahmed,
senior vice president at Oak Investment Partners. "They will
provide best-in-class A/D converters."
At the same time, Kenet's formidable intellectual property
gives Oak something that "early-stage investors" will call an
"exit strategy," Ahmed said. Oak- whose incubates have included
2Wire, Aras, CoVi Technologies, Excel Switching, Kineto Wireless
and Movaz Networks-is not averse to having one of its properties
acquired by a larger company in need of the IP. Thus, Kenet
might wind up licensing its technology to a potential
competitor, rather than competing as a fabless semiconductor
maker. "It's a big market," Ahmed acknowledged. "And Kenet's
position is still young."