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Intel Snaps into the Photonics Business

Leading semiconductor concern Intel Corp. started its assault on the optical-networking sector back in 1999. Today, the company is creating a new front in its efforts to be a dominant player in the area of "light" networking.

Santa Clara, Calif.-based Intel said it will expand into designing and making integrated passive components for third-party companies. The company said the move brings it "a key capability that adds to its core strength in opto-electronic components and highly integrated optical modules."

The announcement "is part of Intel's long-term strategy to grow its communications business and be the leading building block supplier for high speed, high capacity optical networks," officials said in a mid-afternoon statement.

To support its photonics business, Intel recently completed a 70,000-foot design, fabrication, and assembly/test facility in San Jose, Calif., built specifically for photonic component manufacturing using 8-inch silicon wafers. Intel said it also recently acquired Templex Technology, Inc., which provided additional photonics expertise. The purchase also brought Intel a component technology known as "Bragg-Grating," described as a highly precise filtering and mixing technology used in the manufacturing of photonic components.

Intel will use its facility and recent acquisition to provide photonic design and manufacturing services for optical component and system manufacturers that are focused on the metropolitan and long-haul market segments. Besides offering application-specific design libraries for components such as custom array waveguides and other basic photonic building blocks, Intel said it will sell customer-specified solutions at varying levels of integration, from wafers and die to subassemblies and finished photonic modules.

"Intel's entry into photonics is an outgrowth of many years of internal research and development and a core expertise in silicon manufacturing," said Rama Shukla, general manager of Intel Photonics. "With the trend toward higher levels of integration and application-specific needs in photonics, we're well positioned to provide customer-driven solutions with state-of-the-art design and process technology that offers best-in-class performance, cost and density."

Last April, Intel signaled its further intent to be a dominant player in the optical-networking arena by buying three California-based companies that have key capabilities and technologies for producing opto-electronic components, or electrical components used in optical networking equipment.

Intel's acquisitions of Cognet, nSerial and LightLogic, extended Intel's product portfolio to include a new breed of opto-electronic components that lower the cost and power consumption of optical networking equipment, officials said.

Cognet and nSerial both develop high-speed electronic components for 10 Gigabit Ethernet optical modules. LightLogic was a provider of highly integrated, high-speed optical transponders targeted at the rapidly growing metropolitan market segment.

During the past year, Intel said it has become a leading provider of opto-electronic silicon components for communications equipment that sends data over long distances at 10 Gigabits per second (Gbps) - a speed known in the telecommunications industry as OC192. Intel's presence in this market segment is the result of its acquisition last year of Giga A/S. Intel is now developing its next generation of opto-electronic components, which will support data rates of 40 Gbps.

Intel has also begun investing in next-generation semiconductor manufacturing process technology targeted for the optical market segment. In February, Intel announced an investment in Communicant Semiconductor Technologies AG, based in Frankfurt, Germany. Communicant is building a manufacturing facility that will build semiconductor components based on a new Silicon-Germanium-Carbon process technology.

Just 2 years ago, Intel started its "light brigade" charge by buying Level One for $2.2 billion.

And Communications Industry Researchers Inc. (CIR) earlier this year said Intel was a "company to watch" in the Optical Ethernet market. CIR also claimed that pricing wars and the slower adoption of Optical Ethernet in the public network will leave room for fewer than ten suppliers in the near-term future, down from literally dozens that exist today.