We use cookies to provide you with a better experience. If you continue to use this site, we'll assume you're happy with this. Alternatively, click here to find out how to manage these cookies

hide cookie message
 
75,052 News Articles

NetLogic will help Broadcom tap into 4G, cloud

For $3.7 billion, Broadcom would get a supplier of smart chips needed in new, fast networks

Broadcom's deal to buy communications processor vendor NetLogic Microsystems for US$3.7 billion will help the company feed the fast-growing demand for intelligent chips in all kinds of networks.

The acquisition, announced Monday and expected to close in the first half of next year, will expand Broadcom's product lines to include processors for the "mobile packet core" of devices that handle traffic on LTE (Long-Term Evolution) networks. It also will help the company offer more capable processors for wired service-provider and data-center network gear, analysts said.

Broadcom already supplies communications processors for a wide range of wired and wireless network systems such as Ethernet switches. Buying NetLogic will help it move into more advanced types of chips needed for security, traffic prioritization and other tasks. The deal may put pressure on some other specialist manufacturers in this area to be acquired, analysts said.

In particular, NetLogic should take Broadcom into the market for multicore, programmable processors that can do deep packet inspection, according to IDC analyst Abhi Dugar. Broadcom tried to break into this area several years ago with an earlier acquisition but failed to capitalize on that deal, Dugar said. Intel and Freescale control about 75 percent of that market, he said.

"It really rounds out Broadcom's portfolio for network infrastructure," Dugar said.

Faster radio networks, especially LTE, have heightened the need for intelligent traffic-handling on mobile networks. For example, new systems to prioritize different types of traffic and keep track of subscribers' data use require chips that can perform DPI (deep packet inspection), said analyst Greg Collins of Exact Ventures. These chips, including ones from NetLogic, look at the contents of each packet for information to use in decision-making.

LTE treats all mobile traffic as IP (Internet Protocol) packets, and in the next few years, voice calls will also be carried on LTE. If carriers want to ensure voice gets through on time while Web browsing waits, they are likely to use DPI to make the distinction in real time, Collins said. The same kind of chips are used to keep track of how much data a particular customer has used and helps the carrier keep that user informed or to throttle their network speed, based on whatever the carrier's policy may be.

However, making chips for both mobile clients and infrastructure gear won't really help Broadcom create new capabilities and features between the two, analysts said.

The need for smarter chips also extends to wireline networks and data centers, Linley Group analyst Linley Gwennap said. Cloud computing, multimedia services and mobile use all are putting pressure on infrastructure. "You need to get the information from the client to the cloud," Gwennap said.

Broadcom's size should help to make NetLogic competitive against Freescale and Intel, he said. Meanwhile, the deal could lead to more consolidation, he added.

Advancements in networking chips may lead to popular new services in the future, Gwennap said. One feature that hasn't yet been widely deployed is the ability to detect security breaches and website attacks from within the network gear itself, he said.

Stephen Lawson covers mobile, storage and networking technologies for The IDG News Service. Follow Stephen on Twitter at @sdlawsonmedia. Stephen's e-mail address is stephen_lawson@idg.com


IDG UK Sites

Netflix to introduce price increase: New subcribers to start with

IDG UK Sites

Apple financial results: iPhones, iPads & Macs sales for Apple's Q2 2014, plus shares to split

IDG UK Sites

Twitter - not news

IDG UK Sites

See Moo Studios' new animated advert for Blue Moon beer