Opto Inside

Electronic News, April 30, 2001 by Alex Romanelli

Intel improves its optical networking portfolio through acquisitions

Intel Corp. last week announced plans to improve its optical networking offerings through the acquisition of three privately held companies that specialize in optoelectronic components. The acquisitions will allow Intel to move from the long-haul network segment into the areas of metropolitan and enterprise networking.

Santa Clara, Calif.-based Intel (nasdaq: INTC) announced that it has already acquired Cognet Inc. and nSerial Corp. The two companies develop high-speed electronic components for 10Gigabit Ethernet optical modules. Terms of the acquisitions were not disclosed, but Intel said the cost for nSerial was $66 million.

Los Angeles-based Cognet develops components for switches, servers and edge-routers that process electrical signals within optical modules after those signals have been converted from light waves. Santa Clara, Calif.-based nSerial develops components to convert those electrical signals into the protocols used by networking devices. Both companies use a complementary CMOS manufacturing process, allowing Intel's network communications group to offer high-speed CMOS silicon components to LAN/WAN market segments, Intel said.

"Today's acquisition has given us a metropolitan presence immediately, and nSerial and Cognet allow us to get into the enterprise area with their CMOS l0Gbit/sec. silicon for l0Gigabit Ethernet," said Tony Stelliga, general manager of strategic marketing and business planning for Intel's optical products group. "We have very high performance of silicon bipolar and silicon germanium through last year's acquisition of Giga A/S, and now we have CMOS for enterprise networks, which is more cost-effective for the reach, and performance doesn't matter as much. It's a multisegmented capability we have now."

Intel said it will also acquire Newark, Calif.-based LightLogic Inc., a supplier of integrated, high-speed optical transponders for the metropolitan market segment, for about $400 million. LightLogic's transponders convert optical signals into fully formatted digital signals, which will reduce development time of optical networking equipment, Intel said.

"The Cognet and nSerial acquisitions give us lower-power technology because we can do the optoelectronics in CMOS, and LightLogic gives us the ability to extend the reach," Stelliga said. "Which means that for a given power budget, we can extend further into the network than traditional approaches by as much as 400 percent. We can do that by using our forward error-correction, which gives us a coding gain, and by using the very high-coupling efficiency that LightLogic has in their modules."

Stelliga said that Intel has decided to supply module products as well as system components as part of its strategy for supplying building blocks at all levels of integration, giving the company a competitive edge.

"LightLogic also has the ability to automate the attachment of fiber and automate the assembly of optical modules," Stelliga said. "To date that's been done by a manual process that takes a very long time, is very painstaking and is very expensive. (LightLogic is) actually able to align the fiber down to almost to 0.1-micron so that the fiber is placed right where the photonic energy is. That greatly increases the reach and the quality of the optical signal and it reduces power. Cost reduction in automation is something the photonics industry is ready for, and we look forward to providing that cost improvement too."