Although the Network Processor (NPU) market has been sluggish in recent years, it is finally perking up, according to In-Stat (http://www.in-stat.com). Overall NPU units shipments grew in 2004 by 86% over 2003 shipments and overall revenue will approach half a billion dollars by the end of 2008, the high-tech research firm forecasts. Although that growth is tempered by a penetration rate of just 10% of the possible sockets, it still results in significant shipment and revenue growth for the foreseeable future.
High-End NPUs (10 Gpbs and up) are the bright lights in this market. Most types of information protocols can fit into harmonics of 10 Gbps. This means that High-End NPUs are very valuable in places where there are many different types of protocols such as between Local Area Networks (LANs) and storage facilities.
In-Stat has also found that:
While the Mid-Range (1 to 5 Gbps) market is doing just fine, partially due to designs created years ago, the High-End (10 Gpbs and up) market is expected to enjoy 155% growth from 2003 to 2004.
High-End NPUs will grow their share of the bounty from about 8% in 2003 to almost a quarter of the entire market in 2008.
While Intel again garners the top spot for market shares in the first half of 2004, EZchip may see the biggest gains from 2003 to 2004 with a projected 168% growth in its NPU revenues, compared year-over-year.
Most OEMs have spent several decades using Application Specific Integrated Circuits (ASICs), and some still need some persuading to enter the world of NPUs.
This Market Alert was drawn from the recent In-Stat report, NPU2004: Old Promises Create New Revenues (#IN0401340NT), which provides a technical overview, complete with detailed P/L models for NPU versus ASIC use, a market overview, and vendor profiles. It includes detailed analysis of 26 large networking markets. Also provided are market shares of the overall, Mid-Range, and High-End markets.
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