Manufacturing Industry

Jockeying for NPU top spot: Big blue challenges Intel during IDF week, no less - IBM PowerNP4GS3 to compete with Intel IXP 1200 - Product Announcement

Electronic News, Feb 25, 2002 by Gale Morrison

Intel Corp. is expected to add to its line-up of IXP network processors this week as part of the huge semi-annual Intel Developer Forum (IDF) that opens tomorrow in San Jose. But Intel will have competition in this network microprocessor horse race.

IBM got wind of this development about a week ago--it didn't say how--and whipped up a torrent of information on its apparent lead in the network processor market. IBM also made sure to mention the best-product nods it got from technical analysis outfits MicroDesign Resources (best NPU) and The Linley Group (best switch fabric).

Judging by the fierce jockeying for position between not just Intel and IBM but also Applied Micro Circuits Corp. (AMCC), Agere Systems and Motorola, networking OEMs are finally starting to take out their wallets and get serious about betting on a merchant chip vendor.

"We have seen over the last six months an acceleration of interest in this technology at the tier-one networking guys," said Steve Longoria, director of marketing for IBM Microelectronics' network processing group. "All of us expected to see a bigger ramp back in '99 and into 2000. But it wasn't until we really got the expense squeeze and started to see the development cycles getting slower in 2001 that networking companies really started to look at the expense of developing all your ASICs from scratch. That's providing an entry for network processors."

Ironically, IBM and Intel entered the network processing gate in the same week of mid-August 1999. But only post-boom, Longoria said, have the communications equipment makers come out to read the flags and talk to the natives.

"We're still doing a ton of ASICs business with Cisco and others. But there is a more serious deference now to the make-versus-buy decision. This is true at lots of OEMs, from wireless infrastructure to cable access to edge router guys. Network processors are a very viable technology for them," he said.

Longoria added that IBM is getting called into a lot of the areas where their customers have themselves been pulled into technologies that they are less familiar with.

"We're seeing a lot of interest stemming from this convergence of networking servers and storage that's going on," he said. "The server and storage guys don't want to learn about networking. They've got enough to do. We spend a lot of time there developing solutions optimized for both those application spaces."

The slowdown in the build-out of the optical network has certainly intensified the jockeying for position and the amount of thought that goes into network processor roadmaps. Marketing presentations right now from networking ICs' Big Five are all about the 10Gbits/sec., OC-192 node. Those ICs may come out of the fab by the end of this year, but more likely in 2003.

"There's a real struggle with the marketplace's demand for OC-192 in 2002," Longoria continued. "That's based on the market slowdown that we're all suffering from." IBM is going to enhance its OC-48 line this year and will offer OC-192 next year, he said, which is almost exactly what Intel is planning.

The real competition, then, is at 2.5Gbits/sec., or OC-48, and even at 1Gbit/sec., or OC-12. And that's where Intel and IBM are neck and neck, with AMCC, Agere and Motorola being much more than a minor nuisance to both of them.

Longoria said IBM's PowerNP4GS3 trumps Intel's IXP 1200, but clearly the two are working feverishly to hit the right performance and price point with members of each of these families.

"For more than a 1Gbit/sec., I beat Intel because it takes multiple chips to do what one PowerNP does," Longoria said. But clearly Intel is doing something right because IBM is going to release new PowerNP versions that strike right where the Intel IXP 1200 price and performance does.

"If a customer needs a gigabit or less, they will go with Intel because it's a cost-sensitive solution. It can be priced lower because they have a quarter of the performance," he said. "All I can say right now is watch this space. We'll be back in a couple of weeks."

IBM has gotten an independent endorsement of its leadership claims from RHK Ltd. of London, the well-respected communications IC house. IBM says that in a soon to-be released market share study, RHK found IBM Microelectronics grew its network processor share from 8 percent to 25 percent in 2001 to attain the No. 1 market share position for the programmable network processor space.

"I was really pleased with that. And surprised," Longoria said "I'm surprised that Intel and AMCC weren't ahead of us, given that they were in production earlier than us. I guess the market downturn hurt more than I thought."

Intel would not comment on this week's developer's forum.