Intel is to stop manufacturing peripheral controllers for the Universal Serial Bus (USB) standard which could result in a $20 million windfall for fellow chip company, Cypress Semiconductor.
Intel has licensed its USB technology to Cypress, which is already a market leader in selling controllers to PC peripheral makers.
An Intel spokesman said the company was pulling out of the business because it had achieved its goal of kick starting the use of USB, which simplifies the connection of peripherals to PCs.
"We never intended to be in this business long term," said the spokesperson.
The USB market had been slow to take off until Microsoft included USB drivers with Windows 98. Market research predicts that the market will grow at 100 per cent compounded through 2003. If each of the 100 million PCs that are predicted to ship next year had an average of five USB connections, that adds up to a market for peripheral controllers of between $100 million and $400 million.
Cypress expects to sell $30 million worth of USB chips this year and $100 million in 2000. A spokesman for Cypress said adding the Intel developed controllers to its product portfolio could bump up its revenues by $20 million.
Intel will continue to play a major role in enhancing the USB technology. It is one of seven companies on the USB 2.0 Promoter Group, which includes Microsoft, Lucent, NEC, Philips, Hewlett-Packard and Compaq.
Transfer rates for USB 2.0 are expected to reach between 360Mbits per second and 480Mbits per second, which is some 30 to 40 times faster than USB 1.0, and about 100 times faster than the original serial port on Windows PCs. These transfer rates will enable applications such as full motion video to run via a USB connection.
Today the technology is widely used in printers, scanners, cameras and external storage, and is extending into such applications as broadband communications, wireless phones and handheld devices.
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