Intel Buys Chip-Design Firm

Intel said Tuesday that it's acquiring West Bay Semiconductor Inc. to improve its networking chip business. West Bay, based in Vancouver, Canada, designs high-speed and high-density networking chips that transport voice and data over Sonet/synchronous digital hierarchy-based optical networks.

Although Intel won't disclose the terms of the acquisition, the company said in a statement that it's a "cash-for-assets" transaction that will let Intel combine West Bay's architectural and design efficiencies with the 90-nanometer silicon manufacturing process. This combination is expected to reduce the cost, power consumption, and complexity of the optical networking equipment using these chips.

The acquisition of West Bay lets Intel expand its product line to offer computer and networking equipment manufacturers a single architecture and software platform to use in designing and building communications equipment. "Intel is moving up the food chain into the optical space," says Frank Dzubeck, president of Communications Network Architects. "They see this as the next big thing."

Most of West Bay Semiconductor's employees will join Intel's optical products group, which is part of the company's communications division.