RealTime IT News

Agere Systems Buys Ethernet Chip Developer

Agere Systems Monday said has purchased Massana. The Dublin, Ireland-based company develops chips that could deliver gigabit-rate Ethernet connections over existing copper wires.

Agere, of Allentown, Pa., makes semiconductors for voice and data communications networks to customers including Cisco Systems, Samsung and Lucent. The company spent approximately $26.2 million in stock for Massana, and will add most of the 45 Massana employees to its payroll.

Agere executive vice president Sohail Khan says the Massana acquisition will give the company a jumpstart into next-generation networking.

"We believe that the transition to GbE represents a major opportunity for Agere," Khan said in a statement. "The acquisition of Massana, which is one of the few companies in the world with a working GbE PHY, will allow us to address the emerging GbE market quickly, with the right feature set, at the right price points."

While most enterprise networks typically run at speeds of 10 to 100 megabits-per-second over installed copper networks, the company is betting the industry will migrate to new technology that can deliver ten times that speed using the same infrastructure. Massana's gigabit Ethernet (GbE) chips are in the sample stage and have been tested for IEEE 802.3 compliance and validated by the University of New Hampshire's InterOperability Laboratory.

Agere will bring the product to market, hoping to sell it to Ethernet switch providers, PC manufacturers and server OEMs. It plans to deliver a 0.13 micron product in early 2004 and an octal 8-port chip in mid-2004, just in time for what may a booming market.

Market research firm IDC estimates that the Ethernet IC total available market in 2005 will be $2.5 billion, with the GbE chip segment seeing a compound annual growth rate of 37 percent from 2002 to 2005.

Agere's revenues for its third quarter of fiscal 2003, ending June 30, were $456 million, up 3 percent from previous quarter revenues, but slightly down from the same quarter in 2002, which reaped $498 million.