Intel Isn't Through With NPUs
Rumors began to spread after Intel's January reorganization under new CEO Paul Otellini. The communications product lines ended up inside the Digital Enterprise Group, a move that gave them less prominence to outside viewers. Many took it as a sign that Intel was giving up on network processors or at least dropping development of the high-end parts, particularly the IXP2800.
That device isn't dead; it's just that the chip's OC192 target market moves slowly, Intel says.
"The gestation period for these designs has been longer than we expected, but they're starting to move into production," says Doug Davis, an Intel vice president and the general manager of its Communication Infrastructure Group.
In the meantime, most of the OC192 network processor buzz is going to startups EZchip Technologies and Xelerated Inc., each of which picked up additional funding this year (see EZchip Nets $10M Extension and Net Processors Bloom at 10-Gig).
Most of the activity in network processors, also called network processing units (NPUs), has come from access equipment -- the sole market for startup Wintegra Inc. and a renewed center of focus for established companies like Agere Systems Inc. (NYSE: AGR.A) and Applied Micro Circuits Corp. (AMCC) (Nasdaq: AMCC). Intel, too, seems to have focused most of its energy on access products, as opposed to the core routers that network processors originally targeted.
"Intel and AMCC are studiously ignoring that high-end market and letting EZchip run away with it," says Linley Gwennap, principal analyst with The Linley Group. "If Intel comes out with an incredible product, EZchip would clearly be the big loser. The interesting question is how big the high end is."
So far, it's a small fraction of a small market. Linley Group forecasts from December put the network processor market at a likely $150 million in 2005. Weak prospects and expensive product development prompted big players such as Freescale Semiconductor Inc. (NYSE: FSL) and Vitesse Semiconductor Corp. (Nasdaq: VTSS) to back out of high-end network processors (see Cingular Trials Lucent UMTS).
Intel says it has no particular fear of the network processor startups, claiming the IXP line is far more programmable than the other OC192 network processors available. Rivals have countered by noting the IXPs are difficult to program, particularly when it comes to dividing tasks among the multiple mini-processors inside each chip.
Intel hasn't stopped design work on its high-end network processors, Davis says, although most of the work is on incremental changes. A low-power version of the IXP2800 is nearly ready for production qualification, for example. But the next dramatic step, to 40-Gbit/s devices, won't be happening for a while.
Customers say they want 40-Gbit/s network processors, but the volumes aren't enough to justify building such things. "We ask: So, you need, what, 100,000? They say: somewhere between tens and hundreds a year," Davis says.
Intel combines its network processor revenues with those of other processors, so it's difficult to tell how well the product line is doing. While hinting that network processors continue to lose money, Davis insists Intel isn't content to let them stay that way. "We're not going to stay in any business that's not profitable."
— Craig Matsumoto, Senior Editor, Light Reading