EZchip’s NP-1 chip is being manufactured at IBM fabrication plants in the United States.EZchip, a subsidiary of Yokneam, Israel-based LanOptics, Ltd, has jumped a couple of steps ahead of its larger competitors such as Intel in creating a monster 10-gigabit network processor chip aimed at a world of expanding bandwidth.

The Israeli-designed chip, known as the NP-1, was introduced in April. The technology is designed to be used in products like routers, switches and firewalls for telecommunications and the Internet. The market for such a fast chip is still emerging in the beaten-down telecommunications sector, but networking analyst group Cahners In-Stat sees the demand for chips for these high-end networking applications growing to $2.8 billion by 2005 from a starting point of $67 million in 2002.

The NP-1 is being manufactured in the United States in fabrication plants operated by IBM, according to LanOptics, Ltd. founder Eli Fruchter.

EZchip sees the NP-1 as a replacement for solutions that are now being rigged up by hardware manufacturers internally as well for boxes using 1-gigabit chips, such as the IXP-1200 from Intel. A single NP-1 will replace 10 to 20 chips from the competition and reduce power consumption by more than 80 percent, enabling providers to offer higher-speed Internet and other data services at lower cost, said Rob O’Hara, vice-president of sales for EZchip at its North American headquarters in Campbell, Calif.

Forbes magazine recently praised the NP-1’s technology, writing that the product delivers better performance for one-fifth the cost, one-fifth the power consumption, on one-fifth the number of chips than the competition.

The NP-1 performs all processing tasks on a single chip, allowing for the creation of boxes that handle lots of Internet traffic more efficiently and much more quickly.

For example, when a user attempts to access a major Internet server, such as Yahoo.com, the information requested is directed through 20 to 30 routers before it reaches his computer. The NP-1 will help network designers reduce these system-related bottlenecks, increase bandwidth and rout traffic more efficiently.

The company is aiming its 10-gigabit chips at router manufacturers and telecommunications companies, such as Cisco Systems, Nortel Networks, Lucent Technologies, and Juniper Networks.

“Our chip will sit in the large space run by businesses or carriers where they aggregate a lot of bandwidth to help develop a more-efficient, feature-rich, cost-effective infrastructure,” O’Hara said. “Use of the NP-1 will reduce chip count, and, thus, complexity, lower materials costs and reduce power use, a key factor in the economics of the telecommunications base.”

O’Hara said Intel is still several months away from offering a competing chip, but by the time they roll out their 10-gigabit offering, EZchip expects to have introduced a second-generation chip with even better performance and more advanced features.

“It’s a very difficult technology to master, and many larger competitors have either postponed or cancelled their 10-gigabit programs. That leaves us in a pretty good position,” O’Hara said.

EZchip also received a nomination to the World Technology Network in July. The goal of the four-year-old Network is to bring together the leading individuals and corporations from 20 technology-related disciplines so that thoughts and knowledge can be openly shared, new avenues explored, and new relationships developed.

“To be selected as a finalist of a World Technology Award, is to be recognized by your peers as being among the very few leading innovators in your field whose work is having a genuine and substantial impact on the world in which we live,” said James Clark, chairman and founder of the organization,

Such international high-tech stalwarts as HP, Nokia, NTT DoCoMo, and SimbaNet were also selected as finalists, Fruchter said.