The market for network processor chips (NPUs) is finally taking off, according to a research report released this week by In-Stat. Following several sluggish years, NPU unit shipments grew 86 percent between 2003 and 2004, and revenue is expected to approach $500 million by the end of 2008.

Although mid-range (1 to 5 Gbps) NPUs are doing well, high-end NPUs (10+ Gbps) represent the hottest sector. The high-end NPU market grew 155 percent from 2003 to 2004, compared to just eight percent in 2003. High-end NPUs will account for nearly 25 percent of the market by 2008, In-Stat says.

“Most types of information protocols can fit into harmonics of 10 Gbps,” explains In-Stat analyst Eric Mantion, who adds, “High-end NPUs are very valuable in places where there are many different types of protocols, such as between LANs (local area networks) and storage facilities.”

However, Mantion notes, “Most OEMs have spent several decades using ASICs (application specific integrated circuits), and some still need some persuading to enter the world of NPUs.”

Further details about the report, entitled NPU2004: Old Promises Create New Revenues, are available here.

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