Intel Investing in Passave Technologies

The quest for one Israeli company to build better ‘Ethernet In The First Mile’ product got a boost Friday as chip making giant Intel said it has come on board as a new investor. Financial details of the funding were not disclosed.

Tel-Aviv, Israel-based Passave is a fabless system-on-chip vendor, developing core technology for broadband fiber access systems. The company’s portfolio includes the PAS5001 OLT chip, and PAS6001 ONU chip which is based on the IEEE 802.3ah standard.

The company said the funds raised complete Passave’s first round of investment, and are intended to finalize product design of Passave’s first generation First Ethernet PON chipset, and commence shipment to initial customers.

“We are excited to welcome Intel Capital as an investor” said Ariel Maislos, President of Passave Technologies, “We plan to use these funds to add to our R&D investment of the first Ethernet PON chipset. Wide availability of standard complying chips helps reduce systems cost, and accelerates deployment of FTTH services worldwide.”

PONs rely on lightwaves for data transfer. In a PON, signals are routed over the local link with all signals along that link going to all interim transfer points. Optical splitters route signals through the network; optical receivers at intermediate points and subscriber terminals tuned for specific wavelengths of light direct signals intended for their groups of subscribers. At the final destination, a specific residence or business can detect its specified signal.

PONs are capable of delivering high volumes of upstream and downstream bandwidth (up to 622 Mbps downstream and 155 Mbps upstream), which can be changed “on-the-fly” depending on an individual user’s needs.

Santa Clara, Calif.-based Intel Capital has a $500 million Communications Fund. The investment division is currently on a spending spree. In October, Intel said it would plunk down upwards of $150 million in the next two to three years to make sure that Wi-Fi technologies succeed. Intel is also approaching high-speed networking with the same fervor.

“Optical Ethernet in the first mile is a next step in the evolution of broadband access. Passave’s approach to developing EPON technologies in this emerging market, is responding to the market’s needs,” said Intel Strategic Investments Manager William Kilmer.

The No. 1 chipmaker’s push into networking is also a good bet considering a report released earlier this year shows that the market for Ethernet switching components will reach over $1.7 billion worldwide in 2006, driven primarily by growth of Optical Ethernet.