Discera, a San Jose company that has been developing an alternative to existing oscillators — the electronic heart beats in all digital devices — has raised $17.5 million in a third round of financing.

Discera is one of the first companies to start shipping a MEMS based oscillator, which relies on semiconductor technology, and which the company says is cheaper and more efficient than existing quartz crystal oscillators.

Analysts say the market for oscillators is about $3 billion a year, with Gartner Dataquest predicting growth of 40 percent by 2010.

The round was led by Scale Venture Partners, and included Horizon Ventures and previous investors 3i, Partech International and Ardesta LLC.

From the statement:

Discera’s technology consists of a silicon MEMS resonator and an ASIC embedded within a conventional QFN plastic package or ceramic package. Discera is offering the product directly through a worldwide set of channel partners and through industry leaders such as Vectron International.

Discera has been successfully sampling its product since last year. This past November, Discera demonstrated its technology as a plug-and-play direct replacement of quartz crystal in a camcorder device — the first MEMS demonstration in a consumer device. Key target applications for MEMS-based timing devices are PCs, DVD players, gaming consoles, set top boxes, camcorders, PDAs and cameras as well a variety of industrial products.