The acquisition, , will expand Broadcom's product lines to include processors for the "mobile packet core" of devices that handle traffic on LTE (Long-Term Evolution) networks. It also will help the company offer more capable processors for wired service-provider and data-center network gear, analysts said.
Broadcom already supplies communications processors for a wide range of wired and wireless network systems such as Ethernet switches. Buying NetLogic will help it move into more advanced types of chips needed for security, traffic prioritization and other tasks. The deal may put pressure on some other specialist manufacturers in this area to be acquired, analysts said.
In particular, NetLogic should take Broadcom into the market for multicore, programmable processors that can do deep packet inspection, according to IDC analyst Abhi Dugar. Broadcom tried to break into this area several years ago with an earlier acquisition but failed to capitalize on that deal, Dugar said. Intel and Freescale control about 75 percent of that market, he said.
"It really rounds out Broadcom's portfolio for network infrastructure," Dugar said.
Faster radio networks, especially LTE, have heightened the need for intelligent traffic-handling on mobile networks. For example, new systems to prioritize different types of traffic and keep track of subscribers' data use require chips that can perform DPI (deep packet inspection), said analyst Greg Collins of Exact Ventures. These chips, including ones from NetLogic, look at the contents of each packet for information to use in decision-making.