IDC Expects the Network Processor Market to Heat Up

MOUNTAIN VIEW, Calif., May 10, 1999 — A revolution is occurring in the communications semiconductor industry. Time-to-market turnaround and bottleneck issues inherent in today's LAN and WAN equipment architectures have created a significant opportunity for companies to provide a new category of programmable processors. This information comes from a new bulletin from International Data Corporation (IDC) titled Need for Next-Generation Switches and Routers Drives Network Processor Revolution.

"As the demand for networking convergence increases, semiconductor vendors will need to offer network-optimized products to enable higher-layer quality-of-service (QoS) intelligence at wire-speed performance levels," said Sean Lavey, Research Analyst in IDC's Networking Semiconductor program. "The successful implementation of this new breed of chips will spark many changes in the networking marketplace as these semiconductor vendors try to position themselves as the de facto standard in the industry."

A growing list of network processor (NPU) vendors, which includes Intel, Agere, C-Port, Maker Communications, MMC Networks, SiTera, Softcom Microsystems, and T.sqware, have announced products or intentions to provide network processors to power the next generation of networking equipment. In response, already-established ASIC and MPU competitors are planning to improve their products and revamp their strategy to defend against these emerging players. With all this increased vendor activity, IDC expects the worldwide NPU market to grow to over $300 million by 2002.

"The trend toward network access consolidation of data, voice, and video traffic will become very critical to the growth outlook for networking OEMs and service providers," Lavey said. "The value of silicon will become more apparent as semiconductor vendors drive the future of edge and core networking equipment."

IDC believes the initial benefits of NPUs will fit best with high-end applications, such as core switches, high-end enterprise, and carrier-class routers. IDC expects midrange and low-end enterprise LAN markets, such as workgroup switching, to ramp up NPU usage in the latter part of 2001.

IDC's new bulletin, Need for Next-Generation Switches and Routers Drives Network Processor Revolution (IDC #B19154), examines the network processor semiconductor market and highlights the key players to watch. The bulletin includes a forecast through 2002. To order a copy, contact Sue Beauregard at 1-800-343-4952, ext. 4774 or at For more information on IDC's Semiconductor Research program, please visit

About IDC International Data Corporation is the information technology industry's most comprehensive resource on worldwide IT markets, trends, products, vendors, and geographies. IDC provides data, analysis, and advisory services to the world's leading IT suppliers as well as IS professionals in finance, insurance, entertainment, advertising, consumer goods, and publishing. IDC's research and opinions are based on the results of more than 300,000 end-user surveys, in-depth competitive analysis, broad technology coverage, and strategic analysis. IDC is committed to providing global research with local content through its 500 analysts in more than 40 countries worldwide. Additional information on IDC can be found on its Web site at

IDC is a division of International Data Group, the world's leading IT media, research, and exposition company.

# # #

All product and company names may be trademarks or registered trademarks of their respective holders.