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Freescale Halts Net Processor Line

Light Reading
News Analysis
Light Reading
5/27/2004

Freescale Semiconductor Inc., the newly christened semiconductor arm of Motorola Inc. (NYSE: MOT), has discontinued development of its network processors, according to a report published today by The Linley Group.

The C-10, a 10 Gbit/s network processor, is now "officially dead", says Bob Wheeler, senior analyst for networking silicon at The Linley Group. Development of the companion Q-5 traffic manager chip has also been terminated.

In an email to Light Reading, a Freescale spokesman confirmed the products have been discontinued.

The decision is a landmark in the short history of network processors, as the Motorola chips originated from C-Port Corp., one of the first companies to produce an OC48 network processor. The C-Port brand name was valuable enough that Motorola still uses it when referring to the chips or to the network processor group.

Motorola acquired C-Port in May 2000 for stock worth $430 million, part of a feeding frenzy that saw Agere Systems Inc. (NYSE: AGR.A), Applied Micro Circuits Corp. (AMCC) (Nasdaq: AMCC), and Vitesse Semiconductor Corp. (Nasdaq: VTSS) make similar buys.

Motorola had trouble extending the C-Port line, however. Originally announced in 2001, the C-10 has suffered massive schedule slips that now look set to become permanent (see Motorola Stuck on C-Port).

Freescale will continue to sell the C-5e, which is its latest OC48 network processor, and an FPGA version of the Q-5, according to Wheeler. "But seeing no roadmap for future improvements, new customers are likely to shy away from the C-Port devices," he notes.

IBM Corp. (NYSE: IBM) and Vitesse have likewise curtailed development of new network processors. Vendors still plugging away include Agere, AMCC, EZchip Technologies, Intel Corp. (Nasdaq: INTC), and Xelerated Inc.

Cutting next-generation products did no harm to Vitesse, which saw sales of its network processors increase afterwards, thanks to old design wins. This seems unlikely to happen in Freescale's case, because revenues for the C-Port chips are already declining. In 2003, Freescale held a 12 percent market share, compared with 15 percent in 2002, according to figures from The Linley Group (see Network Processor Revival).

In the absence of new network processors, Freescale will turn to its PowerQuicc processors, applying them to the data plane by infusing them with some of C-Port's technology, Wheeler says. PowerQuicc chips are based on PowerPC microprocessor technology, which traditionally has been used for control plane applications.

Nevertheless, Wheeler thinks Freescale is unlikely to remain a force in the high-end network processor market. "These future products may increase PowerQuicc's market, but they are unlikely to deliver the performance needed to truly replace the C-Port network processors," he contends.

Motorola is preparing to spin out Freescale as a separate company in the next few months (see Motorola Names Semiconductor Firm).

— Pauline Rigby, Senior Editor, Light Reading

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