A San Francisco start-up has beaten Intel in the race to build fibre optics directly into a silicon chip.

The breakthrough, announced by silicon designers Luxtera, allows a 10Gbps fibre optic link to be built directly into a processor, dramatically lowering the cost and increasing the simplicity of building such high speed networks.

Intel has declared its intention to build similar devices, but has so far only managed a tenth of the speeds Luxtera is claiming. Intel had also predicted that the first products would not be available until the end of the decade.

"Until now, all of the progress in silicon photonics has been in the form of research. Luxtera is the first company to develop a complete, working product that meets a market need," said Linley Gwennap, principal analyst at The Linley Group, a semiconductor technology analyst firm.

"I am impressed that Luxtera has accomplished this feat using a production CMOS process, allowing its technology to be built in CMOS fabs all over the world."

It is important that the new chips conform to the CMOS production process since it is used in most of the world's chip production facilities. Most PCs use CMOS chips.

"This development of the world's first 10G optical modulator in CMOS is a huge milestone for the Luxtera team and for the industry in general," said Alex Dickinson, co-founder and chief executive at Luxtera.

"Most importantly, this clearly signals that CMOS photonics products are just around the corner, not years in the future. We are already far along with our product development."