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Intel sees cheaper, better optical nets

The chipmaker plans to make money off communications technology by lowering the cost and increasing the performance of optical networking.

SAN JOSE, Calif.--Intel plans to lower the cost and increase the performance of optical networking technology, the company said Wednesday, part of the chipmaker's effort to make money off communications as well as computing technology.

Most computers use copper wire to connect to networks because it's cheap, but that technology has gone about as far as it can go, said Sean Maloney, executive vice president of Intel's Communications Group. To deal with the problem, the company is working to improve fiber-optic networks, which carry information in the form of light pulses rather than electrical signals.

"We are reaching the limits of copper to carry signals. We've almost got a wall in front of us. After 100 years of being able to send signals by copper, we're reaching the end of that," Maloney said in a keynote speech at the company's Intel Developer Forum here.

The speech also covered Intel's new Xeon server chips and "Plumas" chipset. Meanwhile, Mike Fister, general manager of Intel's Enterprise Platform Group, clarified the company's position on the InfiniBand connection technology.

But fiber-optic communications is expensive--in particular, the transceivers that send information to and receive information from the fiber-optic lines. Since the beginning of the year, though, Intel has reduced the transceiver costs from about $15,000 to $1,500, and the company expects to reduce that to less than $100 "in the next couple years," Maloney said.

Intel also is about to build its own tunable lasers based on technology the company acquired when it bought start-up New Focus, Maloney said, a key step in increasing the amount of data that can be shipped over optical fibers. Tunable lasers can be adjusted to send different frequencies of light instead of being locked to a single frequency.

Intel last week began selling networking equipment using others' tunable laser technology that can send eight frequencies of light, but the New Focus-based products, due in early 2003, will support 40 or 80 different light channels, spokesman William Giles said. Intel is using technology from its April 2001 acquisition of LightLogic to make the equipment small enough, he added.

The moves highlight Intel's years-long effort to diversify from computing products such as desktop computer processors into communications equipment. Intel's push into selling networking electronics took off in 1999 with the purchase of Level One Communications and has been continuing with a spate of acquisitions ever since.

Even though telecommunications companies currently have more networking capacity than is needed, Intel is confident demand will catch up, Maloney said. One indicator: From 1999 to 2001, the number of Intel e-mail messages doubled despite the fact that the company had fewer employees.

Though research is showing some possibilities for copper wires carrying signals at 10 gigabits per second, it's impossible to do so for distances longer than 60 or 80 meters, he said.

Wi-Fi perils
Intel is advocating wireless networking technology louder and louder, hoping to profit from the idea that people can connect to networks without having to be near a network jack. Wireless networking technology drives Intel business by bringing new utility to computers and handhelds and as a side effect, requiring more networking equipment such as fiber-optic transceivers to transmit that data.

But Maloney said standards difficulties could hold back the now-blossoming world of 802.11 wireless networking. He exhorted the computing and communications industry to prevent a standards war over what will prevail as the current 802.11b standard, also known as Wi-Fi, is supplanted by faster but sometimes incompatible 802.11a and 802.11g standards.

"We're going to ruin this technology if people end up confused over a or b or g or whatever," Maloney said.

Intel's solution to the problem is to develop a PC card modem, code-named Calexico, which contains Intel wireless chips that work with both 802.11a and 802.11b networks. The modem is due early next year.

In addition, security is a growing concern for wireless technology. Maloney said Intel advocates adoption of the TGi security standard in 2003.

Faster server chips
Intel also announced new Xeon chips for servers Wednesday, as expected. Dual-processor models running at 2.6GHz and 2.8GHz cost $433 and $562, respectively, in quantities of 1,000.

Intel also announced a 1.6GHz Xeon processor that will run at a lower voltage and therefore will consume less power and be better suited to small systems such as super-thin "blade" servers. It consumes an average of 30 watts of power, Maloney said, and costs $350 in large quantities.

In the fourth quarter of 2002, Intel will begin selling its new versions of its E7500 chipset. Code-named "Plumas," this collection of supporting chips connects a computer's main processors to the rest of the system. Current Plumas systems communicate with the processor that has a data-transfer pathway running at 400MHz, but future models will have a 533MHz speed.

Fister, general manager of Intel's Enterprise Platform Group, qualified Intel's position on the high-speed InfiniBand connection technology at the keynote address. Intel announced in May it had canceled plans to build InfiniBand chips.

Fister said Intel still is an advocate of InfiniBand, but that it's not likely to fulfill one of its earlier possible missions, connecting servers to storage systems. It mostly likely will be used to connect servers to each other, he said.

"InfiniBand isn't dead everywhere, but it's clearly dead for storage," said Peter Glaskowsky, editor-in-chief of the Microprocessor Report, an industry newsletter. "What InfiniBand has lost is its universal deployment vision of the past."