A Gap at 100Gig
At the problem's root: Green technology and consumer electronics are what captures VCs' hearts today. Geeky physical-layer chips are so 2002.
That means we aren't seeing a crush of startups targeting the problems of high-speed interconnect.
Suddenly, the NetLogic Inc. acquisition of Aeluros Inc. is looking more important. (See SerDes Pays Off .)
NetLogic makes what it calls knowledge processors -- a specialized memory/processor combo that Cisco Systems Inc. (Nasdaq: CSCO) uses in routers. And as data rates increase, these parts -- like many others -- are facing some problems.
"We're going into a generation of ASICs and FPGAs and network processors that are going to be pushing up to 100 Gbit/s of data. Just getting information from one chip to the next is taking a significant level of expense," says Chris O'Reilly, NetLogic's vice president of marketing.
That's where Aeluros comes in. "You can't buy [100 Gbit/s] technology off the shelf," O'Reilly says. "We're in kind of a unique market where we need this intellectual property before the analog [chip-design] houses have it available."
So, NetLogic snapped up Aeluros, one of a former bevy of chip startups targeting 10 Gbit/s interconnect. Its present designs have been stingier on power than alternatives, and it was bringing in enough revenues to make the acquisition a break-even deal, O'Reilly says.
Not a lot of startups matched the profile. BitBlitz and Velio were long ago grabbed by Intersil Corp. (Nasdaq: ISIL) and LSI Corp. (NYSE: LSI), respectively. (See Intersil Acquires BitBlitz and LSI Snares Velio.) Quellan Inc. is out there -- it issued a "terabit" press release just today -- but that company has gravitated towards storage, not telecom. (See Quellan DeliversTbit Density and Quellan Raises $20M, Eyes Storage Market.)
Truth is, most of the high-speed interface work today is being aimed at HDTV, O'Reilly says.
NetLogic's niche isn't teeming with competitors. It's them against Integrated Device Technology Inc. (IDT) (Nasdaq: IDTI) and Renesys Corp. , for the most part. Still, it will be interesting to see if some other chip company, maybe in a different sector of the telecom market, ends up wishing an Aeluros was still out there for them.
— Craig Matsumoto, West Coast Editor, Light Reading