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Intel to buy three optical networking firms

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Intel on Tuesday agreed to buy three privately held companies that make components for optical networking equipment as the world`s largest chipmaker continues its push into new markets beyond its bread-and-butter microprocessor business.

Intel paid about $400 million for Newark, California-based LightLogic, a maker of gear that converts optical signals into digital signals, an Intel spokesman said.

The Santa Clara, California-based company paid about $66 million for nSerial., also based in Santa Clara, which makes high-speed electronic components that convert electrical signals into the language used by networking devices.

Intel is not disclosing how much it paid for Los Angeles-based Cognet, a maker of components that process electrical signals in optical modules after those signals have been converted from light waves, the spokesman said.

Intel is also not saying whether it paid cash or stock for the three firms, the spokesman said.

Intel bought 16 companies in 2001, the bulk of which were in the networking industry, and this year`s acquisitions have largely been in that area. While more than 75% of Intel`s sales still come from microprocessors -- the primary computing engine of personal computers -- the Silicon Valley giant has built a multibillion-dollar networking business that is profitable.

The products made by the companies it is acquiring lower the cost and power consumption of optical network equipment, Intel said.

"Our communications equipment customers are asking us to integrate high-speed electronic and photonic components into cost-effective building blocks that help them reduce time-to-market," said Mike Ricci, Intel`s Optical Products Group general manager.

Intel said the purchases are subject to regulatory review and that it expects them to close in the second quarter.

Intel competes against Cisco Systems, 3Com and others in the data-networking industry, where it principally is a supplier of networking gear to small and medium-sized businesses.

Reuters News Service

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