Intel has announced that it will buy Fulcrum Microsystems, a fabless chip company that designs chips for networking equipment.

Intel, fresh from splashing out cash on a Russian shoe shop and a mobile marketing outfit, is buying something that actually has some relationship to its core business of making chips. Fulcrum Microsystems designs chips that end up in switches and routers, which have to route ever larger amounts of data.

The acquisition will allow Intel to strengthen its datacentre portfolio and offer more than just chips and network cards for use in servers. Kirk Skaugen, VP and general manager of Intel’s Data Center Group said, “Fulcrum Microsystems’ switch silicon, already recognized for high performance and low latency, complements Intel’s leading processors and Ethernet controllers, and will deliver our customers new levels of performance and energy efficiency while improving their economics of cloud service delivery.”

Like many recent acquisitions in the datacentre industry, Intel’s decision was fuelled by the growth of cloud services. In a datacentre that has servers that form part of a cloud the networking interconnect between those servers is of vital importance. As the bandwidths of those interconnects increase, greater demands are placed on the switching fabric to route network packets without introducing latency.

Fulcrum Microsystems designs chips that end up in high-end network switch gear that supports 10Gbps and 40Gbps Ethernet standards. This isn’t exactly the kit that you find bundled in the free routers that internet service providers throw in with a broadband subscription.

Intel did not disclose how much it will pay for Fulcrum Microsystems but said that it expects to close the deal this quarter. µ


PS: Intel, Dell who’s next one in network industry?