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Technology Stocks : Intel Corporation (INTC) -- Ignore unavailable to you. Want to Upgrade?

To: muzosi who wrote (133562)	4/28/2001 12:10:25 PM
From: Joseph Pareti	Respond to of 186894

sorry if already posted Source: Network Briefing Date: April 25, 2001 Number: 4150 Intel Corp said yesterday that it plans to bring the benefits of automated manufacturing to the optical components world after it bought a trio of companies developing products for this market. The Santa Clara, California-based chip giant paid about $400m for Light Logic Inc, which is based in Newark, California, and about $66m for nSerial Corp, which is based in Santa Clara. It has also bought Los Angeles, California-based Cognet Inc for an undisclosed sum. LightLogic specializes in developing transponders, which combine lasers, micro-optics and high-speed electronics. nSerial develops physical layer components, including transceivers, for the 10Gb Ethernet optical and copper markets. Cognet also designs 10Gb components, which process signals after they have been converted from optical to electrical form. Tony Stelliga, general manager for strategic marketing and planning for optical products at Intel, said the LightLogic acquisition in particular will help bring the kind of automation that has underpinned Intel's traditional microprocessor market to the optical networking market. The manufacture of optical networking kit had yet to undergo large scale automation, he said. This had not been a problem in its earlier days, when various issues, including shortages of components, had meant cost was not a major focus. However, as optical projects reached the metro or enterprise level, cost had to become an issue. This would be where the ability to produce modules combining multiple components would kick in, as well as Intel's experience of economies of scale. More cost effective components would speed up the design of systems, he said. "We intend to apply our skills in that space," he said. The other acquisitions will flesh out Intel's 10Gb offering, Stelliga said, meaning it will now span the gamut of installations. At the same time, their expertise in CMOS manufacturing processes will offer opportunities to reduce power consumption in optical components. Intel has made great play of the importance of the communications market to its future as its microprocessor business matures. However, its forays into the communications and networking markets have yet to deliver any real dividends. It does not break out its communications business results separately, but its most recent figures showed that its non-microprocessor business as a whole made a loss in the first quarter. However, with the optical market being stopped in its tracks as service providers run into their own problems, Intel could actually be well placed to flesh out its portfolio. Richard Cunningham, senior analyst for optical networking at Cahners In-Stat, said a lot of optical developers would have secured funding "before the doors were shut." However, some may be running out of steam now, and represent good value buys for a company like Intel. So far, he said, Intel had been something of a "stealth candidate" in this market. Stelliga said Intel had already signed up a broad range of customers for its optical products, but these customers are under wraps until major deployments. "They are there," he said.