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Intel: watch out for those network building blocks

Level One, Softcom -- what's next?

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A week ago, we pointed out that Intel's share price was on an inexorable rise and indeed when Wall Street shut Friday, with the price at $66¼, not too far off the $75 we predicted then. Intel's financial results come out Tuesday and we see no reason why its price shouldn't rise further tomorrow, given that it's expected to show little pain from competing processor companies such as AMD, Cyrix et al. When Craig Barrett, CEO of Intel, was in London a few weeks ago, he said that his company was in the business of providing "building blocks" to the computer industry. Employing not a little stealth, Intel has been ensuring that over the last year it has some of those blocks in place, particularly in the area of high-speed networking and datacoms. Last Thursday it bought privately owned Softcom Microsystems but this is only one item in the $3 billion Intel has spent over the last year on moving into the networking and telecomms market. One of its bigger acquisitions, Level One, which cost Intel $2.2 billion, went practically unnoticed by the world+dog when it was bought on the 5th of March this year. This time last year, Intel struck a strategic relationship with Level One, so perhaps the deal should have been foreseen. Intel's ambition to own the building blocks of the computer industry now extends far beyond the microprocessor in your desktop, notebook or server PC. It is remodelling itself as an Internet company and if it owns a good chunk for the building blocks for that phenomenon, it will be in a vastly more powerful position than before. Internet server farms and deals with ISPs and language translation companies, as well as companies like Level One and Softcom, all fit into Barrett's building block model. He's a manufacturing man, so look out for more infrastructure buys. Intel has 67,000 employees and The Register only has eight journalists, so sometimes it's hard to track Chipzilla in its move to become an even bigger player in the world wide market. But trace elements and particulates such as Softcom all provide the clues to the scale of Satan Clara's ambitions. ®

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