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Intel unveils network plan
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September 1, 1999: 10:13 a.m. ET
With networking architecture, Intel makes strong push into Net structure
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NEW YORK (CNNfn) - Intel Corp. pushed strongly into the networking sector Wednesday, announcing new semiconductor plans and acquiring the networking applications firm Netboost.
At its developer forum in Palm Springs, Calif., Intel unveiled a new network processor architecture that it will use to design chips for the growing networking segment. Networking technology manages the flow of data over a network, such as the Internet.
Intel (INTC) shares rose quickly at market's open on Wednesday, gaining 2-7/16 to 84-5/8.
Networking architecture is becoming increasingly important as the Internet grows and the ability of computers and appliances to work together becomes more key, according to Mark Christensen, vice president of Intel's Network Communications Group.
"The explosive growth of the Internet and e-business requires faster deployment of high-bandwidth equipment and greater flexibility to support emerging Internet technologies and new services within the network," said Christensen.
The line of new communications products, known as Intel Internet Exchange (IX), is aimed at allowing system designers to add and change features on their networks more easily.
Ultimately, Intel hopes its networking initiatives will create a system on which data moving over the network will flow at its full capacity without bulging at some points and trickling at others.
As for Netboost, Intel will pay cash for the company, but would not disclose the purchase price. Intel previously made a minority investment in the privately held company in July 1998.
With the acquisition of Netboost, Intel is looking to gain the company's chip-making technology along with its software applications, which allow for the creation, changing and monitoring of networked systems.
The next step for Intel will be to get companies to sign onto its vision of the networking future. To that end, Intel has already reached agreements with Cisco Systems Inc., Newbridge Networks Corp. and Cabletron Systems Inc., among others, to use its new chips.
Funding for the future
Intel said its Internet Exchange plans and acquisition of Netboost are part of an overall strategy to build up its operations in the area of networking.
To fund further research and design in this area, Intel also announced Wednesday it was creating a $200 million fund - known as the Intel Communications Fund -- to invest in companies which are developing technology based on Intel's IX platform.
The fund will typically make minority investments of $10 million or less in companies. In return, Intel will offer the companies the inside track on any emerging Intel information on IX.
Intel, the world's largest semiconductor maker, already has strategic investments of approximately $3.5 billion in about 275 companies worldwide.
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Intel
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