Intel to buy Softcom

By Jack McCarthy, Computer World |  Networking

Intel Corp. plans to buy New Jersey-based networking processor maker Softcom Microsystems Inc. as part of the chip giant's increased push into the Internet market.

Based in Iselin, N.J., Softcom develops processors for networking equipment such as routers, switches and access devices that are used to direct voice and data across the Internet and traditional networks, Intel said in a statement issued Wednesday. Intel didn't disclose the price of the purchase, but did add that the deal will be an all-cash transaction.

As sales of personal computers decline -- a key revenue market for Intel products -- Intel is increasingly looking to bolster sales of components for networking operations, one analyst said.

"They are looking to be the technology provider for companies that are building networking systems," said Rob Enderle, an analyst with Giga Information Group Inc. in Santa Clara, Calif.

Intel took an important step in that direction in March when it paid $2 billion for Level One Communications Inc., a maker of networking components, said Tom Beermann, an Intel spokesman. "Clearly, networking is a growing and strategic part of our business at Intel," he said.

Softcom is a start-up with 32 employees. Despite its small size, "they have technology that we don't have," Beermann said.

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