Intel Corp has emerged as the buyer for the Ethernet product lines that Alexandria, Virginia-based Microdyne Corp has been trying to get rid of since June of this year (CI No 3,183). Microdyne made the decision to close down its Networking Products division even though it accounted for around half of its $80m revenues in the four quarters ending in March 1997. It said the price war early this year had resulted in a 40% drop in adapter card prices, and that the Networking division just couldn’t pay its way. Microdyne will concentrate instead on its aerospace and telemetry businesses. Intel only emerged as a buyer after negotiations with an unnamed Taiwanese company broke down in August (CI No 3,241). Intel gets a license for Microdyne’s Fast Ethernet ISA adapter card product line and technology, a robust, fully developed product line with an established place in the market according to Michael Jalbert, Microdyne’s president and chief executive officer, who claimed the deal would assure its customers of future support. Intel hopes to see revenues of up to $1bn in annual sales this year from its networking division, and is already a close number two in the market behind 3Com Corp for Fast Ethernet cards (CI No 3,285). Earlier this year Intel acquired Ethernet product company Case Technology A/S for $72m, bought a 12% stake in Xircom Inc for $52m, and shored up networking chip firm Standard Micro Corp with a $14.6m, stake. Terms for the Microdyne deal were not disclosed.
