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Comms chips

ZettaCom Finds a Home

ZettaCom Inc., one of the startups building chips related to network processors, has found safe haven in the arms of established chipmaker Integrated Device Technology Inc. (IDT) (Nasdaq: IDTI).

The $35 million cash deal, annnounced yesterday and due to close this month, brings IDT into the markets for Switch-Fabric Chipsets and Traffic Manager Chips, areas that have seen plenty of startups fail as business stalled (see PetaSwitch Kicks the Bucket). Switch fabrics forward packets from one linecard to another, while traffic managers prioritize the packet flows, making sure time-sensitive sessions such as voice calls don't get gridlocked.

ZettaCom CEO Daryn Lau will join IDT and spearhead a new "serial switching division," which will focus on devices conforming with the PCI Express and Advanced Switching interface standards (see Backplane Standard Gains Allies). ZettaCom's products will be the foundation of the division, and 29 of ZettaCom's 36 employees will join IDT, Lau says (see IDT to Acquire ZettaCom).

While $35 million doesn't seem bad for a chip startup, it's important to remember ZettaCom raised $77.7 million in its lifetime (see ZettaCom Lands $19M).

IDT is no stranger to the packet-processing area. The company leads the market in classification chips, also known as search engines, which use content addressable memory (CAM) to store information such as IP lookup tables. A move into switch fabrics could be rewarding.

"The whole fabric space doesn't have any dominant player," says Jag Bolaria, analyst with The Linley Group. "IBM, which used to be a big player, sold out to AMCC, which means AMCC has the challenge of folding [IBM's] French office into their operation." Moreover, IBM's fabric uses a different architecture than AMCC's previous efforts, complicating the question of how to integrate the products into one road map, Bolaria says. (See AMCC Switches On IBM's Fabric.)

Advanced Switching adds a new wrinkle as well, because even though interface standards exist, it can be tough getting different vendors' linecard chips to work together. "It's still proprietary," says Lau, "not at the physical layer but at a transactional layer."

ZettaCom had already steered its product plans towards Advanced Switching, and Lau expects most OEMs to start demanding standard interfaces. The trend means IDT may have found a good time to get into this market. "The whole fabric space is going to get disrupted with standards like Advanced Switching," Bolaria says. "Somebody can come along and establish a leading role."

Bolaria estimates ZettaCom is getting $5 million per year in revenues. From that base, IDT could become a substantial switch-fabric player by 2007, he says.

Both ZettaCom and Internet Machines (now called IMC Semiconductor Inc.) had tried to skirt the interface issue by offering groups of chips: a network processor, switch fabric, and traffic manager. The chips could be purchased individually, but the idea was that by buying all three from one vendor, an OEM could be assured the chips would interoperate.

As the market crumbled, so did the all-in-one strategy. ZettaCom gave up on the network processor, focusing instead on a switch fabric and traffic manager, and trimmed its U.S. staff to concentrate on Asian sales efforts. IMC dropped its product plans in favor of selling PCI Express bridge chips (see AMCC, ZettaCom Cut Staff and Internet Machines Starts Anew).

Remaining competitors in the switch-fabric market include Agere Systems Inc. (NYSE: AGR.A), Applied Micro Circuits Corp. (AMCC) (Nasdaq: AMCC), Broadcom Corp. (Nasdaq: BRCM), Dune Networks, Erlang Technology Inc., Marvell Technology Group Ltd. (Nasdaq: MRVL), Mindspeed Technologies Inc. (Nasdaq: MSPD), Sandburst Corp., Tau Networks Inc., TeraChip Inc., and Vitesse Semiconductor Corp. (Nasdaq: VTSS).

Some of those companies offer traffic managers, as do a few network processor vendors. Azanda Network Devices and Teradiant Networks Inc. remain the only companies offering a traffic manager alone.

— Craig Matsumoto, Senior Editor, Light Reading
truelight 12/5/2012 | 2:01:30 AM
re: ZettaCom Finds a Home For the light reading record.
kwwok 12/5/2012 | 2:01:16 AM
re: ZettaCom Finds a Home Well, all engineers at Zettacom know that. However, I give credit to these greedy executives who manage to sell rubbish for $35M.
ZoomB 12/5/2012 | 2:01:08 AM
re: ZettaCom Finds a Home won't work? OR is it the AS products? Clearly both the ASI SIG as well as PCI Express camps have clout. So this sounds like a good move.
rswitch 12/5/2012 | 2:00:58 AM
re: ZettaCom Finds a Home Why "greedy executives"?
The VCs get 50 cents on the dollar and the engineers (at least those in India) keep their jobs. What's wrong with that?
BlueWater66 12/5/2012 | 2:00:37 AM
re: ZettaCom Finds a Home Typo below, I obviously ment "Packet" ... I type too fast & my figures have a mind of their own.

-------- ORIGINAL MESSAGE ------

I wouldn't think AS (PCI-Express) and IP Router Switching Cores would really have much in common? Any comments would be welcome.... I'm confused. As I understand it,

AS / PCI-Express is a switched bus architecture for internal system and backplane connections. I think this is primarily used in Blade Servers, some storage, high end PCs .... no lookup tables or IP package processing. Certainly no CAM.

IP Router chips (Zettacom's focus for the last 4 years) focus on look-up tables, IP package switching etc... These are all external ports being switched and (I'd guess) VERY DIFFERENT.

Obviously someone with "switching" experience could use that to develop a new type of "switch", but I wouldn't think the inner cells in these chips would have anything in common........ Isn't the AS world controlled by people like Intel and start-ups like StarGen?
BlueWater66 12/5/2012 | 2:00:37 AM
re: ZettaCom Finds a Home I wouldn't think AS (PCI-Express) and IP Router Switching Cores would really have much in common? Any comments would be welcome.... I'm confused. As I understand it,

AS / PCI-Express is a switched bus architecture for internal system and backplane connections. I think this is primarily used in Blade Servers, some storage, high end PCs .... no lookup tables or IP package processing. Certainly no CAM.

IP Router chips (Zettacom's focus for the last 4 years) focus on look-up tables, IP package switching etc... These are all external ports being switched and (I'd guess) VERY DIFFERENT.

Obviously someone with "switching" experience could use that to develop a new type of "switch", but I wouldn't think the inner cells in these chips would have anything in common........ Isn't the AS world controlled by people like Intel and start-ups like StarGen?

ZoomB 12/5/2012 | 2:00:15 AM
re: ZettaCom Finds a Home I agree with your comment regarding PCI Express

"PCI-Express is a switched bus architecture for internal system and backplane connections. I think this is primarily used in Blade Servers, some storage, high end PCs .... no lookup tables or IP package processing. "

It doesn't necessarily apply to AS. It depends on the targeted application (i.e. different AS profiles).

Advanced Switching leverages the physical and link layer functionality of PCI-Express, and includes a transaction layer specification that allows people to build solutions for different networking protocols and traffic profiles.

As far as the dominant players in the market go it is still an open field. Driving a standard (companies like stargen) and making a product or profiting from it is a different thing. The overall market is emerging. I would be surprised to see if Intel builds an AS switch (the overall market is too small for their taste)

Current Zettacom products are very different from the AS and PCI Express products they want to build. However it seems like they do have the technical ability to build the products as long as the AS market matures.
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