Network Processor Survival

A few years ago network processors were the rising stars in the semiconductor industry. The hype about them was palpable, activity frenetic, acquisitions in abundance. The possible applications for them was and still is extensive -- routers, switches, wireless base stations, you name it.

Yet like many rising stars, they have fallen fast with the rest of the semiconductor industry these past two years. Already a dozen or more companies that entered the market have exited. Network processors are now being questioned. Will they ever be used in large volumes?

The power of a network processor is so great, the complexity and functionality so sophisticated, blazing fast, and wicked smart. Yet today’s equipment manufacturers don’t want to pay for anything more than they absolutely need, because many of them are in survival mode. They’re going for the practical speeds and bandwidths, solutions that enable them to squeeze as much revenue out of their existing equipment before investing heavily in new equipment.

Despite these challenging times, positive signs are emerging. At the recent Network Processor Conference East (NPC East) in Danvers, Mass., The Linley Group indicated that after several years of decline, network processor design wins have stabilized. Although network processor revenue has been roughly flat during this year’s first half, the market is expected to rise 10 percent during this year’s second half, according to The Linley Group. Compared with the past few years, flat is more palatable than it used to be before the downturn. And a 10 percent increase in this market is uplifting.

Another positive and related development is progress in integration. Combining asynchronous transfer mode (ATM) and traffic management technologies and functions within network processors is spawning economic differentiation in such products. A long-existing technology that is back in vogue these days, ATM is a widely deployed communications equipment technology that manages information flow somewhat like New York City’s Grand Central Station manages people and trains. Traffic management, an ATM function, executes conceptually like a police “traffic cop.” The technology organizes and sets priorities for delivery of voice, data, and video traffic through communications equipment. The fact is some network processing chip companies can offer ATM and TM technologies as part of network processing single chip solutions. But some don’t. This is a key market differentiator.

ATM and traffic management are key functions of network processors and are pivotal for reducing total system costs; enabling faster and more revenue-generating services for wireline and wireless service providers; and accelerating product deliveries of equipment manufacturers. ATM and traffic management are particularly important in the multiservice arena where ATM and Internet Protocol technologies are supported using the same chip.

NPC East presentations contained various solutions involving ATM, TM, and network processing technologies. One integrated TM and ATM on a single chip. Another integrated ATM on the network processor with a separate TM chip. And another required extra chips to achieve fine-grained traffic management. Another offered traffic management on the network processor without ATM functionality, for a lower cost application. And another network processor solution did not support ATM functions.

Putting all three on one chip is the most cost-effective route. It squarely addresses the primary motivation for using network processors rather than ASICs -- economics. In general, network processors require take less time and resources and therefore cost less to build than ASICs. And integrating all three functions on one chip further reduces electronics costs.

Integration of memory technology within network processor solutions also emerged as a theme at the event. Solutions included integration of memory into a network processor, eliminating the need for external content addressable memory (CAM) chips, and thereby reducing silicon and system costs. Another solution included a network processor plus use of embedded static random access memory, while another eliminated the need for external CAM and SRAM chips. There also was some discussion of integrating the switch fabric within the network processors.

With the network processor market so focused on reducing costs and increasing revenues for equipment manufacturers and service providers, integration is a route to survival. Combining ATM and traffic management is a ‘must have’ for multiservice network processor applications now and in the future -- and integrating more memory onto the network processor is also a key economic differentiator.

Which companies now still standing that deliver the highest levels of integration at the lowest total system costs -- while enabling new revenue-generating capabilities -- will be the ones that survive this turbulent market.

Author Information

Rob Munoz is marketing manager with Agere Systems Inc.