Moving on previously stated plans to zoom in on the data-over-cable sector, Terayon Communication Systems Inc. today spun off its silicon unit, creating a new company called "Imedia Semiconductor."

That division designs, manufactures and sells broadband silicon for the cable sector, and includes a focus on Terayon's proprietary S-CDMA (synchronous code division multiple access), as well as A-TDMA (advanced time division multiple access) technologies.

Those schemes are central to CableLabs' forthcoming DOCSIS 2.0 specification, which is designed to mitigate noise and bolster cable's upstream. Although any technology that becomes part of DOCSIS specifications are made available on a royalty-free basis, Terayon has claimed its experience with S-CDMA will give it an edge over its competition for a time as other silicon makers hammer out an implementation of the technology.

One short-term goal for Imedia will be to establish its independence from Terayon, because the chip unit will seek OEM partnerships with a spate of cable modem and cable modem termination system manufacturers.

Tied to that plan, Imedia could seek external financing within the next three to six months, said Terayon CEO Zaki Rakib.

Further, Rakib said Imedia will seek "all options," including an IPO or a merger with another party, as the company tackles the broadband silicon market. Imedia also is in the process of filling its CEO slot, assembling a board of directors and piecing together other elements designed to establish the chip company's sovereignty. Today, Imedia has approximately 100 employees.

Tied to the spinoff, Imedia launched a family of two DOCSIS 2.0-based chipsets: the "IM6000" and "IM96000." The IM6000 is already housed in Terayon's "TJ615" cable modems, and the IM96000 is a "manufacturing ready" reference design. Imedia has also completed a DOCSIS 2.0-based headend chip product called the "IM5000." Imedia has delivered more than 2 million chipsets to its sole customer: Terayon.

Rakib said that could change rapidly, as Imedia hopes to announce new customers by the first quarter of next year, and ramp up volume chipset shipments by the second quarter.

On the CMTS front, Rakib said Terayon has submitted a new, homegrown version of that product to CableLabs for DOCSIS 1.1 qualification testing. Terayon also resells CMTS gear made by Riverstone Networks.

The Imedia name is a holdover from Terayon's acquisition of Imedia Corp. and its "CherryPicker" digital video grooming technology in 1999 for about $100 million. Rakib said keeping the name for the chip division is linked to the possibility that Imedia Semiconductor could eventually make silicon for voice and video equipment.