NPU2004: Old Promises Create New Revenues

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Report Abstract, Table of Contents, List of Tables, List of Figures

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NPU2004: Old Promises Create New Revenues

Service: Networking Technology
Report Number: IN0401340NT
Publication Date: December 2004
Number of Pages: 64
Report Price: $3,495 U.S. Dollars
Analyst: Eric Mantion

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Abstract
The NPU market has had its ups and downs over the last few years. However, now it seems the most of the NPU vendors that remain are enjoying some pleasantly healthly growth – especially for the high-end vendors. A decent portion of these additional revenues are coming from events that could have happened years ago. There is a renewed sense that the recovery is in full swing and OEMs are starting to consider their options again.

While many things have changed over the last few years, the underlying logic behind NPUs helping some OEMs to reach profitability hasn’t wavered. Thanks to software suites, the AdvancedTCA, and other recent improvements, the promises made years ago are now easier to fulfill. And this is making a huge difference in the market.

This 64-page report includes a technical overview, complete with detailed P/L models for NPU versus ASIC use, a market overview, and vendor profiles. We took 26 large networking markets and performed a detailed analysis to determine the following forecasts, by market segments:
-- TAM Shipments
-- ASIC Shipments
-- Penetration Rates
-- Mid-Range and High-End Shipments, ASPs, and Revenues

Plus, market shares of the overall, Mid-Range, and High-End markets are also included.

Table of Contents

Executive Summary
Introduction
Methodology
Technical Overview
- Definitions & Segmentation
- SONET Technology Review
- What Does "Network Processing" Mean?
- Where Do NPUs Fit Within a Nominal System?
- Why Use NPUs Instead of Other Solutions?
  - ASICs versus NPUs
  - The Cost of a Mistake
  - The Evolving Internet
- How important is software to NPUs?
Market Overview
- History of the NPU Market
- The Terrorist Attacks
- Evidence of a Turn Around
- Patience is a Virtue
- The Hope of Tomorrow
- Harmonics are the Key
Network Processor Forecast
- Forecast Process and Assumptions
- Total Available Market (TAM) Forecasts
- ASIC Forecast
- Overall Forecasts
  - NPU Revenue Forecast 2003 to 2008
  - NPU Shipments Forecast 2003 to 2008
  - NPU ASP Forecast 2003 to 2008
  - Overall Market Shares
  - Summary
  - Overall Penetration Rates
- Forecasts by Speed Grade
  - Mid-Range NPUs
    - Market Shares
  - High-End NPUs
    - Market Shares
Network Processor Vendors
- Mid-Range NPU Vendors
  - Agere
  - AMCC
  - Freescale
  - Hifn
  - Intel
  - Vitesse
- High-End NPU Vendors
  - Bay Microsystems
  - EZchip
  - Intel
  - Xelerated
Summary
Appendix A: Glossary

List of Tables

Table 1. Speeds of the SONET and SDH Hierarchy
Table 2. Cost per Good Die Based on Die Size
Table 3. Lump Costs for Product Development, ASIC versus NPU
Table 4. Profit/Loss Model for an ASIC-based Application
Table 5. Profit/Loss Model for an NPU-based Application
Table 6. NPU Market Segmentation
Table 7. Total Available Market Forecast for Medium-Range Sockets, 2003 - 2008(units)
Table 8. Total Available Market Forecast for High-End Sockets, 2003 - 2008(units)
Table 9. ASIC Forecast for Medium-Range Sockets, 2003 - 2008(units)
Table 10. ASIC Forecast for High-End Sockets, 2003 - 2008(units)
Table 11. Network Processor Revenue Forecast 2003 - 2008, ($M)
Table 12. Network Processor Shipment Forecast 2003 - 2008 (units)
Table 13. Network Processor ASP Forecast 2003 - 2008 ($)
Table 14. Summary of Network Processor Market 2003 - 2008 (units, $, and $M)
Table 15. Projected Penetration Rates for Merchant MRNs, 2003 - 2008 (units)
Table 16. Projected Penetration Rates for Merchant HENs, 2003 - 2008 (units)
Table 17. Summary MRN Forecast 2003 - 2008 (units, $, and $M)
Table 18. MRN Revenues 2003 - 2008, by Market Segment ($M)
Table 19. MRN Shipments 2003 - 2008 by Market Segment (units)
Table 20. Summary of HEN Forecast 2003 - 2008, (units, $, and $M)
Table 21. HEN Revenues 2003 - 2008, by Market Segment ($M)
Table 22. HEN Shipments 2003 - 2008, by Market Segment (units)
Table 23. EZchip's Quarterly Revenues for 2003 and 2004

List of Figures

Figure 1. Overall Forecast for NPUs, 2003 - 2008(k units and $M)
Figure 2. In-Stat/MDR's Market Segmentation for Network Processors
Figure 3. The Fundamental Components of an SPE
Figure 4. The Addition of a New ADM to a Typical MAN
Figure 5. Types of Processor Architectures and Stage Timing
Figure 6. Generalized NTC Layout Diagram
Figure 7. Profitability Curves for NPU-Based and ASIC-Based Applications
Figure 8. Desktop Computer Market Shares in 1980
Figure 9. Nominal Volume Curve for a Single NPU Project within a Single Target Market
Figure 10. Compound Volume Curve for Many NPU Projects with Realistic Project Failures
Figure 11. Amalgamation of Queue Managers and Fabric Interfaces into Traffic Managers
Figure 12. A Merchant Silicon-Based MSPP handling Multiple Protocols
Figure 13. AT&T's Internet Backbone Map
Figure 14. Why Harmonics of 10 Gbps will be the Speeds of Choice to Connect Line Cards
Figure 15. Network Processor Revenue Forecast 2003 - 2008 ($M)
Figure 16. Network Processor Shipment Forecast 2003 - 2008 (Munits & kunits)
Figure 17. Market Shares by Revenues for All NPUs (%) for 2003
Figure 18. Market Shares by Revenues for All NPUs (%) for 1H04
Figure 19. Market Shares by Revenues for Mid-Range NPUs (%) for 2003
Figure 20. Market Shares by Revenues for Mid-Range NPUs (%) for 1H04
Figure 21. Market Shares by Revenues for High-End NPUs (%) for 2003
Figure 22. Market Shares by Revenues for High-End NPUs (%) for 1H04
Figure 23. Speed of CPU Trend Against Internet Connection Method

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