Intel to Buy Basis Communications

Intel Corporationhat will immediately expands its network processor line, <%=company%> (Santa Clara, CA) will acquire privately held Basis Communications Corp. (Fremont, CA) in a transaction valued at approximately $450 million in cash and assumed options. Subject to regulatory approval and customary closing conditions, when the acquisition is complete Basis will become a wholly owned subsidiary of Intel operating within Intel's Network Communications Group.

Basis Communications designs and markets advanced semiconductors and other products used in equipment that directs traffic across the Internet and corporate networks. The company's Service-Specific network processors and related software are targeted for a range of network access systems such as switches linking LANs to the Internet and customer premise equipment used in small to medium-size offices.

Growth rates for communications equipment used in small to medium-size businesses and the residential market are expected to increase significantly with the widespread deployment of digital subscriber line (DSL) technologies as well as data-over-cable services. Intel plans to incorporate Basis' network processor technology into the Intel Internet Exchange (IX) architecture in order to target these markets.

To build on Intel's IX architecture
In September, Intel unveiled the Intel IX architecture, a blueprint for building networking and communications equipment using programmable silicon technology. The flagship of the IX architecture is Intel's IXP 1200 network processor, a packet processing device that allows new features and functions to be quickly added to communications gear. According to Intel, the acquisition of Basis will allow Intel to supplement the IX architecture with a network processor specifically designed for customer premise equipment, such as residential gateways and routers.

In addition to network processors, Basis offers a portfolio of wide-area network and serial communication semiconductor products, as well as PC card and interface controller devices targeted at the communications equipment market segments.

Edited by John Spofford