Intel Agrees to Acquire Networking Startup Barefoot Networks -- Update
June 10 2019 - 7:24PM
Dow Jones News
By Asa Fitch
Intel Corp. is buying startup Barefoot Networks Inc. in a bid to
scale up the smaller company's networking-chip technology and
compete with Broadcom Inc.
While Intel is the largest computer-chip maker in the U.S., it
doesn't currently make chips that manage communication via
Ethernet, a widely used technology to connect a vast network of
computers and servers. That arena is dominated by San Jose-based
Broadcom.
The purchase, Intel Executive Vice President Navin Shenoy said,
is aimed at addressing an explosion of data that has bolstered
demand for computing power to analyze it and networking systems to
exchange it within data centers.
Mr. Shenoy said the acquisition is expected to close in the
third quarter. He declined to provide the deal's value.
Barefoot's technology stands out from other Ethernet chips
because of its flexibility: Customers can program the chips to
operate more efficiently according to their specific uses of
it.
Investors in Barefoot before Intel's purchase included tech
giants Alphabet Inc., parent of Google, Alibaba Group Holding and
Tencent Holdings, as well as Goldman Sachs Group Inc. and
venture-capital firms, according to Barefoot's website.
Intel's deal follows renewed investment interest in networking
technology in recent months. In March, graphics and
artificial-intelligence chip maker Nvidia Corp. announced it would
buy networking firm Mellanox Technologies Ltd. for roughly $7
billion.
The Barefoot deal illustrates how Chief Executive Bob Swan, who
became the permanent chief in January, is willing to move Intel
into unfamiliar territory in search of more revenue in a bigger
overall market.
The urgency of Mr. Swan's efforts has intensified as Intel
weathers volatility in its core chip business. Big cloud-computing
companies have held off on purchases of new chips this year after a
glut of buying last year, contributing to Intel's first decline in
data-center chip sales in seven years during the first quarter.
Intel in April also revised its revenue for this year to $69
billion from an earlier forecast of $71.5 billion.
Intel has long dominated the market for computer
central-processing units and successfully pushed its chips into
data centers as cloud-computing expanded, but it has struggled to
gain a similarly dominant foothold in other technologies.
Barefoot was co-founded in 2013 by Nick McKeown, a Stanford
University professor, and quickly attracted investment as it geared
up to challenge Broadcom.
Write to Asa Fitch at asa.fitch@wsj.com
(END) Dow Jones Newswires
June 10, 2019 20:09 ET (00:09 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
Goldman Sachs (NYSE:GS)
Historical Stock Chart
From Apr 2024 to May 2024
Goldman Sachs (NYSE:GS)
Historical Stock Chart
From May 2023 to May 2024