Intel buys Vancouver’s West Bay Semiconductor

Intel Corp. says it will round out its optical networking portfolio through the acquisition of West Bay Semiconductor Inc., a processor firm based in Vancouver.


Bay, for which Intel paid an undisclosed sum, designs chip architecture for voice and data transport over Synchronous Optical Networking/Synchronous Digital Hierarchy (SONET/SDH)-based optical networks.

“”I think this is a good thing,”” said West Bay president and CEO Tino Varelas of the deal. “”We have a very solid product line for 2.5 Gbps SONET/SDH solutions. That’s going to be rolled into Intel’s existing (product lines). They’ve got some 2.5 Gbps products that are complimentary to ours and a very solid 10 Gbps family of products.””

He added that West Bay’s designs may be added to Intel’s 90-nanometer chip technology.

Intel already has a significant investment in the 10 Gbps market, but wanted to bolster its 2.5 Gbps line, according to the company. “”These guys have about five products in the marketplace today that help run OC48 and below — that’s 2.5 gbps speeds — which we feel are very competitive, are pretty consistent with our customer interests and very nice portfolio additions to our already relatively large optical networking IT portfolio,”” said Chris Thomas, director of marketing for Intel’s Optical Products Group.

West Bay will join the Optical group and maintain its Vancouver office. Most of West Bay’s 35-person staff will become Intel employees. Varelas — a veteran of Mitel Corp., co-founder of PMC-Sierra and co-founder of West Bay — said he will take a “”senior management position”” with Intel. A team from Intel will move to Vancouver to help smooth over the transition.

Intel’s interest in West Bay lies not only in its existing products but in intellectual property that could be a boon to Intel in the future, said Thomas. “”These guys have a lot of experience in intellectual property — what we call the bandwidth management IC area, which is a new and emerging within optical networking,”” he explained. “”We feel this is a pretty important and interesting space to move into in the future. We hope to use their expertise combined with our manufacturing prowess to bring some future products to market in this area.””

The 2.5 Gbps market is currently worth twice that of the 10 Gbps market, Thomas estimated, but that could turn around in the near future. “”Most analysts over time actually expect the transition point to happen over a couple of years whereby the 10 gbps market will become larger,”” he said.

Even if returns from 2.5 Gbps begin to diminish, the technology will still be in use a decade from now. “”Telecommunications equipment has a very long lifecycle, so a company may be designing a 2.5 gbps line card today (and) may require volume for that for 10 to 15 years,”” said Thomas.

Added Varelas: “”They recognize that 2.5 Gbps is going to be an important space. It’s going to be around for a fair amount of time.””

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