Chipmaker Cavium Networks Inc. has been moving into the business of manufacturing circuit boards, but that doesn't necessarily mean the company is shifting into the board and subsystems business.

Yesterday, Cavium announced a family of Secure Sockets Layer (SSL) acceleration cards. Prices range from $64.50 to $825; and there's a $6,900 board specially outfitted to fit military standards. Cavium also announced two customers yesterday: Array Networks Inc. and Secure Computing Corp. (Nasdaq: SCUR). (See Cavium Releases SSL Boards.)

Companies such as Cavium, Corrent Corp., Hifn Inc. (Nasdaq: HIFN), and Layer N Networks Inc. sell security accelerators, chips designed for the large-integer mathematics required for encryption. General-purpose processors like Intel's x86 family can do this work, but they get bogged down as line speeds and traffic volumes rise.

But chips tend to get smaller and cheaper over time, and security acceleration has shrunk enough to be included inside some high-end microprocessors (see Chipmakers Flock to Security and Motorola Locks Down Chips). That's led to lower prices. Vendors have responded by adding more functions to security chips, but that hasn't been enough for Corrent, which changed its business model this year to focus on boards (see Corrent Hits the Boards).

Unlike Corrent, Cavium still sees security chips as a viable market. Revenues from boards are "significant," says Rajiv Khemani, vice president of marketing, but Cavium still plans to get most of its money from chips.

Cavium says its market has grown enough to compensate for the lower chip prices. "People that previously didn't use any security acceleration, who just did it all in software on an x86, are saying prices are attractive enough that they can throw in an accelerator," Khemani says. "We're not concerned about the pricing."

Boards wouldn't be a good core business for Cavium anyway, according to Khemani, because too many OEMs, particularly those developing IPSec VPNs, still make their own boards.

— Craig Matsumoto, Senior Editor, Light Reading