Taking a strong leap forward in the growing industry of multi-protocol processing chip production, Lucent Technologies Inc. said yesterday it will purchase Agere Inc., a maker of programmable network processor chips in a deal worth approximately US$415 million.
The fast-moving chips, which can be programmed to incorporate new features and capabilities to switchers and routers even if the components are already deployed in the network, can save time, efficiency and cost if moved at a fast enough rate.
"With Agere, Lucent has a standard product play. Now customers can buy the chip off the shelf and develop software around it. So it's much more of a standards approach," said Sean Lavey, an International Data Corp. (IDC) research analyst, in Mountain View, California. "This brings much faster speeds and changing on the fly."
"The whole crux of this market is to get into Internet space, where packets are moving, and these devices speed these packets along the network," he said.
Bob Bridge, vice president of marketing at Agere, said the union between his company and Lucent's Microelectronics Group should fill in any "holes" on both sides in the fiercely competitive packet-distribution landscape.
"Together we have the packet and ATM processor market pretty well covered," said Bridge. "We (Agere) sell into the carrier edge (platforms), where the need for multi-protocol, frame relay, and high-speed links is crucial."
As part of the acquisition, Agere and its 90 employees will continue to work in its Austin, Texas-based center under the ownership of Lucent. As part of the deal, Lucent will surrender $8 million in stock to Agere.
Bridge said Agere still plans to release its "Payload Plus Product Family" line by summer. He said the definitions of the new product line, featuring process headers of cels and IP frame payloads, are fixed, and will be the last it will produce without the integration of Lucent technology.
Lavey said that an impressive credential Agere brings to Lucent is its OS front-end packet classification engine, Fast Pattern Processor. He said the device will allow networking OEMs (original equipment manufacturers) to build quality of service (QoS) boxes that Voice-over-IP customers want. He said most boxes today are very inflexible and are difficult to scale and upgrade.
The acquisition should be completed by the end of the second quarter, Lucent said.
Lucent Technologies Microelectronics Group, in Allentown, Pennsylvania, is at http://www.lucent.com/. Agere Inc. is at http://www.Agere.com/.