While the global semiconductor market slumped in 2001 along with the PC market, network processors were able to carve out a healthy niche, allowing the category to grow despite the slump. Manufacturers shipped about 100 million network processors in 2001, up about 35 percent from 2000, according to researcher Dataquest. "This environment presents more of an acceleration for the adoption of network processors," Longoria said. "When this market turns, the mix of custom ASICs (chips created specifically for a device) versus network processors doing packet processing is going to be much higher for network processors than we had thought." IBM won't be able to grab share unencumbered in the low-end network processor market, thanks to competition from several other chipmakers, including Intel. Intel's IXA network processors are entrenched in that market, analysts say, in part because of the communications company acquisitions made in 1999 and 2000. "It will take awhile for IBM to show it can compete there," said Linley Gwennap, principal analyst at The Linley Group. "Intel in particular has shown there's a lot of demand for a (network processor) at less than $200," he said. "The question is, can IBM get traction against Intel there? I think IBM will definitely rack up some design wins." The NP2G chip offers a competitive price of about $195. It is also compatible with IBM software development tools for network applications and shares the same hardware socket layout as the PowerNP 4GS3 chip. This allows hardware makers to use the two chips interchangeably in their devices. The chip is available in small quantities now for manufacturers to sample. It is expected to begin shipping in large volumes in June, Longoria said. Products based on the NP2G are expected to come to market by the end of the year, he said.
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