Agere buys chip innovator

Chip manufacturer Agere Systems earlier this month acquired TeraBlaze, a privately held company that specializes in Gigabit Ethernet switching.

Agere was primarily attracted to TeraBlaze’s technology that puts a switch with 48 ports of 10/100/1000G bit/sec Ethernet on a single chip. Two 10 Gigabit Ethernet ports are thrown in for good measure.

These chips would be used by other vendors building enterprise switches, and it’s this kind of chip density that is helping to drive Gigabit Ethernet to very low price levels.

Agere and TeraBlaze see 48-port Gigabit switches starting to really take off. In the past, 12- and 24-port Gigabit switches were the norm, but that is changing, says former TeraBlaze CEO Shankar Mukherjee. However, higher densities than 48 ports are unlikely, unless the RJ-45 format is changed, he says.

Agere says it plans to extend the technology, adding more 10 Gigabit Ethernet ports to the switch. But Gigabit Ethernet will be the main thrust of the company at least for the next two or three years, until there are enough Gigabit ports installed to create more demand for 10 Gigabit.

Agere will keep its network processor business separate, but it will work with the TeraBlaze folks. Currently the TeraBlaze chip performs some packet classification and security functions; it is not programmable, as a network processor would be, but it does work at wirespeed.

All 16 TeraBlaze employees are joining Agere. The stock deal was worth about $21 million.