Scumbria and Thread - Reuters article on Network Processors. Additional details and conclusions by the author.
Intel To Make Networking Microprocessors
By Duncan Martell
PALO ALTO, Calif. (Reuters) - Intel Corp. (Nasdaq:INTC - news) is again turning up the heat at its nascent data-networking business.
In its latest move into the new market, the world's largest chipmaker announced plans Monday to develop a microprocessor designed for the gear that shunts data back and forth on computer networks.
The so-called network microprocessor -- typically thought of as the brains of personal computers -- could let companies such as Cisco Systems Inc. (Nasdaq:CSCO - news), Northern Telecom Ltd (NYSE:NT - news). and Lucent Technologies Inc. (NYSE:LU - news) introduce products far faster than before.
It also would let them upgrade the equipment that directs network and Internet traffic easier and cheaper.
''This would allow for networking manufacturers to implement new upgrades without totally redesigning the chip(s)'' that are in data networking equipment, said Mike Wolf, an analyst at Cahners In-Stat Group, based in Scottsdale, Arizona.
Most data networking gear, such as routers and switches, currently use a type of semiconductor called an ASIC, or application-specific integrated circuit. Instructions for ASICs are hard-wired directly into the chip and can't be changed. But with a processor, networking companies could simply reprogram them with new software instructions, Intel said.
While Santa Clara, California-based Intel already makes a chip used in printers and routers, it does not yet have an offering that would let networking companies link the functions of the myriad ASIC chips now used in each product. The process of designing a new chip takes 12 to 18 months, analysts noted.
Analysts and industry sources expect the network processor to use the StrongArm chip, which Intel acquired from Digital Equipment Corp. about a year ago. They said the StrongArm makes sense because of its low power consumption and simple design.
The analysts said the potential market for the processor is large because of the demand for gear that links networks and routs vast amounts of voice, data and video from one end of the world to the other.
''There's a class of processor out there now where they don't have a solution and companies are throwing tens of billions of dollars at this market,'' said Richard Doherty, director of research for Seaford, New York-based market research firm Envisioneering.
Intel's networking business is expected to be a central focus of its twice-yearly analyst meeting in New York Thursday. Intel executives have said selling networking and communications gear will be the next growth engine for the 31-year-old chipmaker.
Craig Barrett, Intel's chief executive, has already put the data networking business on the fast track.
Mark Christensen, the 40-year-old executive in charge of the group, is charged with boosting revenue growth in Intel's networking business so that it outpaces its rivals by two to three times. Analysts estimate Intel's networking business amounted to $790 million in 1998.
And the forthcoming network processor is merely the latest step in Intel's effort to pump up revenues at the networking business to the ''multibillion'' level.
''Strategically, this is a big deal for Intel,'' said Jim Turley of the Microprocessor Report in Sunnyvale, California. ''Networking right now is one of the minor branches off the Intel tree, but they want it to be a very big deal when and if the PC dies.''
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