Intel To Acquire Networking Vendor

In a move to strengthen its position as an equipment supplier for the growing digital subscriber line (DSL) market, Intel said today it plans to acquire Basis Communications, a developer of networking tools and software, in a $450 million cash and stock agreement.

The Service Specific Network Processor product from Basis will be added to Intel's line of networking processor products. The technology, specifically the gateways and traffic routers designed for consumer homes and small to midsize businesses, will be integrated with Intel's Internet Exchange architecture, a tool that builds networking and communications equipment to work with high-bandwidth connections to the Internet.

One analyst says the acquisition underscores Intel's continued efforts to diversify its offerings. "Intel realizes the microprocessor market has been flat, hence the move into networking and telephony over the last year and a half," says Mike Wolf, senior analyst at InStat. "And they know to stay in the market for networking to small areas. They really don't want to compete with Cisco. Look what happened to 3Com." [See: "3Com Turns The Switch Off On High-End Networking Market"

Basis spun off from Cirrus Logic, a supplier of analog circuits and advanced mixed-signal chips, in October 1998.