Comms chips

Intel's Luck

3:30 PM -- So, Intel Corp. (Nasdaq: INTC) really is keeping network processors, even after selling its optical networking business to Cortina Systems Inc. on Friday. (See Intel Hands Off to Cortina.) For now, anyway.

Yes, the IXP line is probably still losing money, but it's a reasonable gamble for Intel. And it means the storyline continues on one of my favorite anecdotes from the bubble.

It turns out Intel discovered network processors by accident in the corners of Digital Semiconductor, the former DEC unit that Intel acquired in 1998 for $585 million. We heard this back in 2000, at an Intel media dinner hosted by Mark Christensen, then the VP in charge of Intel's communications division. He told us that as Intel officials rummaged through the business, they stumbled onto this funny parallel-processing side project.

Immediately, it went on the scrap heap. But Christensen, suspecting Intel had found something worth rescuing, took the concept to one OEM who called the device a miracle -- exactly what systems vendors (relatively plentiful back then) needed.

At the time, Intel was only interested in superstar products -- billion-dollar kinds of ideas. So Christensen had to fight hard, and he did tell then-CEO Craig Barrett that it would take at least a five-year commitment -- but he got Intel to keep the network processor business.

It's turned out tepidly for Intel so far, but you've got to applaud Christensen's foresight and initiative. At the time, this looked like a great move, and it gave Intel an entry into what would temporarily become one of the hottest segments in semiconductors. Applied Micro Circuits Corp. (Nasdaq: AMCC) spent $4.5 billion in stock to break into the business by acquiring MMC. Intel got in for free.

— Craig Matsumoto, Senior Editor, Light Reading

m_allen 12/5/2012 | 3:41:08 AM
re: Intel's Luck I think Intel had two major issues.
The first was that Intel moved into the network processor (NP) market place around 2000 just as most manufacturers were either pulling out or shrinking as the net bubble started to burst.
The second issue was that the Intel NP's (relative to other processors) are technically demanding to work with, putting the capabilities squarely back into the software camp.
If the software skills are mastered then the current Intel NP lineup is extremely powerful and unlike some other manufacturers NP's are very versatile in terms of packet processing. Getting good software engineers who can think out of the box is key to producing a final product with the IXP lineup. Certainly within my company we are looking at the new IXP2855 for 10G packet processing speeds. I hope Intel keep the faith.
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