QLogic Enters Ethernet Switch Market

by: Frank Berry

On June 23, 2010, QLogic (NASDAQ:QLGC) announced that its new FCoE ASIC, code-named "Bullet," is incorporated into the HP Virtual Connect FlexFabric 10Gb/24-port modules used inside of HP blade servers.

This marks an important design win for QLogic as well as their stealthy entry into the Ethernet switch market. I consider the approach to be stealthy because the press release avoided any reference to Ethernet switching. Makes sense since answering questions about the big design win at HP is fantastic. Not so fantastic is answering questions about how much you’re going to invest in Ethernet switch technology, and how you’re going to compete against Cisco (NASDAQ:CSCO) on their home court.

After looking inside the HP FlexFabric 10Gb/24-port Module, it only raised more questions in my mind about a partnership with Broadcom (BRCM) and how it would impact the switch ASIC and systems strategy for QLogic.

  • Did QLogic spend millions on a new ASIC for OEM blade module biz?
  • Are QLogic-branded FCoE switches and a new gross margin model on the way?
  • Will QLogic become a merchant FCoE switch ASIC supplier to switch system manufacturers that use Broadcom switch ASICs?
  • Is QLogic only designing Ethernet switch ASICs if they start with the letters “FC?”
  • Will QLogic design-out Broadcom in the future to compete against single-chip solutions?

The bottom line is this: The FCoE switch design win at HP, the largest server manufacturer in the world, demonstrates that QLogic has found a seam in the Ethernet switch market where they can leverage their Fibre Channel expertise. But where do they go from there?

Disclosure: No positions