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The History Behind Zyxel, A Steadfast Provider of Modems

by Maria Caballero
Zyxel Company History

Created in 1989 in Hsinchu Science Park, Taiwan, Zyxel Communications Corporation began with a handful of engineers and the leadership of Shun-I Chu. The brand began its journey with a modem, followed by a 3-in-1 modem that allowed users to send fax, data, and voice. The company’s innovations continued throughout the following years as it expanded further into the networking industry. It began offering wireless routers, firewalls, and software. The brand also began expanding globally, beginning in Europe.   

In 1999, Zyxel entered the Taiwan Stock Exchange with the ticker symbol 3704. Seventeen years later, it built Unizyx Holdings, leaving public stock trading and becoming a wholly-owned subsidiary of the holdings company. Today, the brand remains a steadfast provider of modems, mesh networks, home Wi-Fi solutions, and more.  

Dr. Shun-I Chu and How Zyxel Began 

In 1988, Dr. Shun-I Chu rented an apartment in Taoyuan, Taiwan, with a team of four engineers to start a lab and business developing an analog modem. We lack information on what this modem did, but it helped push the blooming business into its foundation. In 1989, Shun-I Chu’s company, called Zyxel Communications Corporation, was launched at Hsinchu Science Park, Taiwan. The brand’s Chinese name means “cooperative and diligent,” reflecting the organization’s history.  

 

Two years after its establishment, the Taiwanese networking brand developed its first modem. In 1992, Zyxel became the first to create an integrated 3-in-1 data, fax, and voice modem, followed by the world’s first analog/digital ISDN modem in 1995. These breakthroughs paralleled the technology boom of the early 1990s and likely increased advanced Taiwan’s standing in the tech and telecommunications industries.  

 

In the same year it developed its first router, Zyxel went international in 1996 when it built its first overseas subsidiary in the United States. After a couple of years, it launched a subsidiary in Denmark, its first European affiliate. Also, in 1998, the company developed and launched the ZyNOS or Zyxel Network Operating System. ZyNOS is a proprietary platform created exclusively for Zyxel devices.  

 

Going Public  

 

With its continuous developments and offers, the business also grew in size. Soon, Zyxel had grown larger enough to apply for an initial public offering (IPO) on the Taiwan Stock Exchange. The brand stepped into the Taiwanese stock market in 1999 with the ticker code 3704. The same year witnessed Zyxel entering the broadband industry with its release of an ADSL router that supported PPPoE or Point-to-Point Protocol over Ethernet connections. This new router model opened new possibilities for its customers, especially those in office buildings.  

 

Going public on the Taiwan Stock Exchange pushed the company further into the wireless telecommunications area. Still led by Shun-I Chu, the company looked into and invested in the network security, WLAN, and central office equipment market. Shortly after becoming a public company, the firm released three new products: its first firewall, WLAN gateway, and DSLAM products. In 2001, the telecommunications brand expanded into Mainland China.  

 

Its continuous development and research led to several accolades. In 2003, Zyxel took the eighth rank in Taiwan’s Top 10 Global Brands by Interbrand. BusinessNext also picked it as the 2nd Top Telecom Equipment Maker in the Taiwan Technology Top 100. These recognitions made the firm even more popular and successful. 

 

In 2004, it earned some more accolades, had revenue surpassing the NT$10 billion milestone, and became the Most Admired Company in Taiwan by the Common Wealth Magazine. The brand also became the largest DSL router brand maker in Europe just as it entered the Voice-over-IP market. 

 

In the following years, Zyxel continued to gain recognition in the tech and telecommunications scene. It also established many more branches in many other countries, like Costa Rica, Japan, and Ukraine. 

 

The company also introduced several firsts in the world. In 2014, it released the world’s first ADSL2+ gateway, which boosts the data rate used for file sharing, surfing, and video conferencing. A year later, it released the first palm-sized portable personal firewall, followed by the first Gigabit active fiber and Telco-grade IPv6 end-to-end solution. The company was the first globally to release a product with a carbon footprint verification in 2010.   

 

Becoming a Unizyx Subsidiary 

 

On August 16, 2010, the Unizyx Holding Corporation was established in Hsinchu, Taiwan, to reorganize Zyxel Communications. With the formation of Unizyx, Zyxel became its 100%-held subsidiary via a share swap with the parent holding company. Becoming a subsidiary of Unizyx led to a share swap. On September 2010, Zyxel stocks stopped being publicly traded with the approval of the Securities and Futures Bureau. The company’s ODM business unit, MitraStar Technology, also spun off in January 2011, also becoming a 100%-held Unizyx Holdings subsidiary. 

 

The firm received its fourteenth consecutive Best Taiwan Global Brands Award in 2016 from the Industrial Development Bureau of the Ministry of Economic Affairs of Taiwan and Interbrand. With its reception of the award, the company rebranded and changed its tagline to “Your Networking Ally.” In 2019, it won the 20-year award from the International Computer Security Association (ICSA) Labs for its anti-virus, anti-spyware software, and web application firewalls.  

 

Assets and Subsidiaries 

 

In early 2013, the company set up Sphairon GmbH to expand into the European market. It also set up a Middle Eastern sub-subsidiary later that year called Zyxel Technology Middle East FZE to boost its standing in that area of the world. 

 

In 2019, Zyxel Networks spun off from Zyxel Communications Corporation. The new business will focus on developing the channel business to provide application services and products for home users and businesses. Meanwhile, the main company will devote its strengths to the structural and service needs of telco providers and the development of the telecommunications market.  

 

Problems Encountered by the Brand  

 

2021 Backdoor Account Scandal 

 

In 2021, security researchers from Eye Control found an admin-level backdoor account in over 100,000 of Zyxel’s firewalls, access point controllers, and VPN gateways. This backdoor account could give cyber attackers root access to the devices, granting one of the worst types of vulnerabilities to users. Some affected devices included top business-grade products often bought by private enterprises and government set-ups. The company released security patches for the affected product lines and encouraged device owners to update their systems.  

 

Company During the Pandemic 

 

The company’s revenues dropped in 2020, reflecting the crisis caused by the COVID-19 pandemic. Its total global revenue of $24 million in 2019 went down to $22 million in 2020. Its net losses increased, too.  

 

However, as more people turned to school and work-from-home solutions, demands for its products skyrocketed. Since the company provided telecommunications and networking hardware and services, its potential in the market also shot up swiftly. Its growth did not come without challenges and competition. 

 

For example, the company had to compete against brands that provided LTE, network security, high-speed home network, and 5G technologies. To maintain a prominent position in the market, the brand engaged in tech developments, provided sought-after products & services, and invested in forward-looking technologies. 

 

Products Offered Today 

 

Since its foundation, Zyxel Communications Corporation has flourished in the telecommunications industry with routers and modems. These backbone products remain in Zyxel’s offerings for small to large businesses, along with switches, mobile broadband devices, and firewalls. The brand also provides training like webinars and certification programs. It also provides hardware made for consumers’ homes, like home Wi-Fi systems, extenders, routers, powerlines, DSL CPE, and personal cloud storage. 

 

While Zyxel Networks is for business and home users, the Zyxel Communications arm is for service providers. Its solutions include fiber access, 5G, Wi-Fi 6 systems, End-to-End services, and more. Accompanying these services are Ethernet CPE, DSL CPE, fiber products, network extenders, carrier & access switches, mesh networking equipment, VoIP telephones, and more. Zyxel’s products are the fruits of its three research centers, four regional headquarters, and over 35 branch office.

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