Zarlink Semiconductor Inc. announced that its standards-based ToP algorithm and Timing Protocol software solution, in combination with processor expertise from leading vendors, provides carriers with a complete solution that meets the performance requirements for synchronization at a mass market cost point. Zarlink believes that this development represents a significant milestone in the path to wide deployment of home and enterprise femtocells. Carriers deploy femtocells, which are small cellular base stations designed for residential and enterprise environments, to improve voice and data services by extending wireless network coverage in areas where access is limited. In addition, femtocells reduce backhaul costs by routing wireless voice and data traffic through the customer's broadband connection. According to Infonetics Research, the femtocell market is expected to reach 68.6 million units by 2013. To bring reliable, high-quality wireless voice service, Zarlink's ToP technology uses the packet network to provide synchronization for the femtocells. Based on IEEE1588-2008 and NTPv4 protocols, ToP technology offers frequency accuracy performance of better than 50 parts per billion (ppb) to align the femtocell timing signals with the cellular network. In comparison, competing solutions rely on costly high-precision crystal oscillators or less reliable indoor global positioning systems (GPS). Zarlink's new femtocell specific ToP algorithm and software is a standalone product portable to processor and SoC devices from vendors. Both IEEE1588 precision time protocol (PTP) and network timing protocol (NTP) solutions targeting WCDMA will be available to picoChip customers for porting to the PC302 and PC312 devices in early 2010.

Zarlink Semiconductor Inc. announced sampling of the Zarlink Optical Engine (ZOE), an innovative scalable-bandwidth multi-chip carrier for dense, compact array-fiber transceivers. The ZOE platform comprises the multi-channel optical light source, optical detector chips, array electronic transmitter, and receiver ICs precision-mounted on a flip-chip glass sub-component carrier with an external array-fiber coupler. The ZOE platform includes scalable products that terminate 40-120 Gbps full bidirectional optical links or array unidirectional or serial function. ZOE has outstanding signal integrity, data density and power efficiency. For environmental and operating cost reasons, data centers require improved optical products for equipment interconnects that consume less power and efficiently support higher data rate performance. A 40 Gbps bidirectional ZOE integrates all key array-optical and array-electronic components on chip carrier; setting a new performance benchmark in the 10-12 mW of power consumption per Gigabit and providing a vast improvement over previous data center interconnect products.

Zarlink Semiconductor Inc. reported unaudited consolidated earnings results for the second quarter and six months ended September 25, 2009. For the quarter, the company reported revenue was $53.6 million compared to $61.83 million in third quarter of 2008. The company reported operating income of $5.17 million, net income before income taxes of $766,000, net income attributable to common shareholders of $135,000 or $0.00 per basic and diluted share compared to operating income of $3.89 million, net income before income taxes of $4.85 million, net income attributable to common shareholders of $6.57 million or $0.05 per basic and diluted share for the same period a year ago. Cash used in operating activities was $9.22 million and expenditures for fixed assets was $411,000 compared to cash used in operating activities was $8.89 million and expenditures for fixed assets was $634,000 for the same period a year ago. For the six months ended September 25, 2009, the company reported revenue was $107.2 million compared to $122.34 million in third quarter of 2008. The company reported operating income of $9.57 million, net income before income taxes of $268,000, net loss attributable to common shareholders of $870,000 or $0.01 per basic and diluted share compared to operating income of $6.17 million, net income before income taxes of $5.82 million, net income attributable to common shareholders of $6.94 million or $0.05 per basic and diluted share for the same period a year ago. Cash used in operating activities was $12.18 million and expenditures for fixed assets was $986,000 compared to cash used in operating activities was $9.13 million and expenditures for fixed assets was $2.26 million for the same period a year ago. On October 28, 2009, the company declared a quarterly dividend of $0.50 per share on its preferred shares payable on December 30, 2009 to preferred shareholders of record as of December 4, 2009. The company provides earnings guidance for the third quarter of fiscal 2010. The company expects revenue between $52 million and $54 million and earnings of $0.01 to $0.03 per share for third quarter of fiscal 2010.