Intel Moves Further Into Network Processor Market

Intel Corp. continues its push into the network processor market with the recent purchase of two companies. The microprocessor giant bought Copenhagen, Denmark-based GIGA A/S (www.gigadk.com) for $1.25 billion in cash and agreed to acquire Basis Communications Corp. (www.basiscommunications.com) for $450 million.

Intel's (www.intel.com) acquisition of GIGA is a move that targets the market segment for high-performance networking chips that direct traffic across the Internet and corporate networks.

GIGA supplies OC-48 and OC-192 products to telecommunications and data communications customers, with applications based on IP, ATM, DWDM, and SONET/SDH transmission standards. The company's optical networking products are targeted at a range of applications that speed transmission over the Internet backbone.

"New, higher-bandwidth access technologies such as xDSL and cable are being deployed at a rapid rate, creating the need for much greater capacity at the core of the network," says Mark Christensen, vice president and general manager, at Intel's network communications group.

Christensen says Intel will combine the chip with the company’s existing Level One Communications Inc. (www.level1.com) design team.

Intel's other acquisition, privately held Basis Communications, designs advanced semiconductors and other products used in equipment that directs network traffic.

Basis Communications’ Service-Specific Network Processors and related software are targeted at a various network access systems, such as switches linking local area networks to the Internet. In addition to network processors, Basis offers WAN and serial communication semiconductor products, as well as PC card and interface controller devices aimed at the communications equipment market segments.

"The acquisition of Basis allows us to supplement the IX architecture with a network processor specifically designed for customer premise equipment, such as residential gateways and routers built to take advantage of DSL deployment," said Tom Franz, vice president and general manager of the network processing group at Intel.

Intel plans to incorporate Basis Communications' network processor technology into the Intel Internet Exchange (IX) architecture.

Intel unveiled the Intel IX architecture, a blueprint for building networking and communications equipment that use programmable silicon technology, last September. The flagship of the IX architecture is Intel's IXP 1200 network processor, a packet processing device that allows new features and functions to be quickly added to communications gear.

A report by market research firm Current Analysis Inc. (www.currentanalysis.com) states that Intel needed to develop chips that are specifically optimized for networking applications because the number of chips it sells to networking vendors is on the rise.

The report finds that several networking vendors are using the Pentium as the processor of choice for packet processing in router and switch products because of its programming flexibility and the range of development tools available. Because general purpose CPUs such as the Pentium are not designed specifically for packet processing, they don’t match the performance of ASICs.

But the Pentium and general purpose RISC processors have a key advantage over ASICs: the networking code is baked into the silicon. ASICs require a 12 to 18 month development process, creating relatively long product cycles for the network equipment vendor and limiting the ability for a networking vendor to add or change product features, the report finds.