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Intel scoops up maker of optical chips

The chip giant says it stands to gain new products, new engineering talent and future technology by buying West Bay Semiconductor.

Intel on Tuesday said it acquired West Bay Semiconductor, a maker of networking chips, for an undisclosed sum.

Vancouver, Canada-based West Bay Semiconductor markets a line of chips used to build optical networking gear. Optical networks transmit voice and data over fiber-optic cables using light.

The buy gives Intel several products that complement its existing suite of optical network options, as well as an experienced design team and technology that can be used in future Intel products.

Intel will add West Bay Semiconductor's roughly 40 employees and products to its Intel Optical Products Group, an Intel representative said.

West Bay Semiconductor's products, many of which focus on networks that operate on data rates of up to 2.5 gigabits per second, complement Intel's existing products, which focus on 10-Gbps networks, the representative said.

Some of the chips Intel gained in the acquisition could be used in gear that connects copper-wire-based networks, such as local DSL networks, with larger optical networks, such as the network backbones maintained by network carriers.

Ultimately, Intel intends to combine West Bay Semiconductor's optical chip designs with its own forthcoming 90-nanometer chip manufacturing techniques. This effort should yield a future generation of optical networking chips that cost less and consume less power, helping networking equipment manufacturers produce less costly gear, Intel said.

Intel has acquired a number of firms in the networking business, many of them as part of a major buying spree between January 1999 and December 2001. During that time it spent $11 billion for 35 companies.

The chipmaker has been doing less buying following the economic downturn that started in 2001. It has even resold a handful of companies or assets it bought during the spree. In one instance, Intel sold the assets of its Trillium Digital Systems division, whose products included software for communications markets.

But the chipmaker is still willing to acquire companies or technology from time to time. One of Intel's last networking-related acquisitions was the purchase of tunable laser technology and other assets from New Focus in a $50 million deal, announced on May 24, 2002.