IBM Favors Power Over Switches

IBM said this week it is selling its PowerPRS Switch Fabric product line including its license property to Applied Micro Circuits . The $47 million deal means the San Diego-based Applied Micro will market, supply, and support the products, which are the central functional block of the ATM switch. Switch fabric is responsible for buffering and routing incoming cells to the appropriate ports.

For its part, Armonk, N.Y.-based IBM, currently an Applied Micro vendor, said it will continue to manufacture the PowerPRS product line as part of its foundry business. IBM said it will also continue to provide legacy documentation until the end of the year.

The world's largest computer maker said it is leaving the PowerPRS Switch business to redouble its efforts on its PowerPC microprocessor, specialty semiconductors and its foundry business. IBM has several processing plants including its newest facility in East Fishkill, New York, which makes the Apple Computer G5 processor.

Currently in its fifth generation of products, IBM's Packet Routing and Switching (PRS) product line is designed into numerous OEM platforms, which the company says are now in production and ramping to volume.

The two companies are also in the middle of local legal negotiations and due processes in a deal where Applied Micro would buy certain related assets of La Compagnie IBM France, a French affiliate of IBM, for an additional $3 million.

Applied Micro chairman, president and CEO Dave Rickey said the acquisition complements his company's existing switch fabric portfolio

"The acquisition of the IBM switch fabric product line allows us to offer our customers an extensive, compatible set of scalable switching solutions targeted at multiple applications, including the core, metro, wireless, and SAN markets," Rickey said in a statement."

In addition to switch fabric products Applied Micro's portfolio includes traffic management, network processor, framer/mapper, PHY and PMD devices designed to enable the transport of voice and data over fiber optic networks. The company says it uses a combination of digital, mixed-signal and high-frequency analog designs and multiple silicon process technologies to accomplish this.