IBM Corp.'s microelectronics unit and Huawei Technologies Co. Ltd. of China today announced a components-supply and research agreement that's expected to speed the delivery of next-generation technologies to China's fast-growing telecommunications market.
Under the terms of the transaction, IBM will supply network-processor and packet-routing switch technology as well as customized ASIC components to Huawei, and also collaborate with the $1.5 billion Chinese company to eliminate compatibility problems with any of their products.
The Chinese company will use IBM PowerNP network processors as the heart of its next generation product line. The special processor and software will prioritize information and increase packet capacity to double capacity on existing communicatin lines.
This is the latest of several deals that IBM Microelectronics has arranged in China in recent months as the East Fishkill, N.Y., chip division intensified its efforts aimed at broadening its revenue base in Southeast Asia through strategic alliances and investments in local companies.
"Working with Huawei provides IBM an unique opportunity to quickly spread its technology around the globe," said an IBM spokesman. "This deal will propel IBM ahead of its competition in China and other important parts of the exploding network communications world."
Huawei officials said the company is making a major push into routers and optical transmission systems, ranging from low-end routers to 10-gigabit-per-second synchronous digital hierarchy (SDH) systems. They said Huawei has sold more than 30,000 sets of SDH systems globally.
The agreement gives Huawei, a supplier of routers and optical transmission equipment, access to the latest networking and telecom technology while opening an avenue for the company to collaborate with Western IP developers in research and development of next-generation products.
"Collaborating with IBM will enable Huawei to have faster access to the advanced networking technologies we need to quickly deliver high-end telecommunications equipment to our customers across the world," said William Xu, senior vice president of Huawei Technologies, in a statement. "Our joint research and development activities are expected to further ensure that we can offer our customers fully-optimized quality networking systems."