Kontron grabs Intel's Communication Rackmount Server business

MUNICH, Germany — Embedded computer manufacturer Kontron AG (Eching, Germany) says he has signed an agreement with Intel to take over its communications rackmount server activities. The move aims at strengthening Kontron's position in telecommunications server markets. The agreement refers to 1U and 2U carrier-grade rackmount IP security server products with expected 2009 sales of about $40 million. It includes R&D and as support facilities in Columbia, South Carolina and manufacturing activities in Penang, Malaysia. The group currently has a total headcount of about 70 persons.
Kontron is already offering carrier-grade telecommunications servers in ATCA and MicroTCA technology. For IP-based security and multimedia streaming applications including video-on-demand, the company is seeking to broaden its product spectrum, explained Norbert Hauser, Vice President Marketing for Kontron. While ATCA servers are characterized by ultra-high availability these application markets require somewhat lower availability characteristics. For instance, hot board swap capabilities are less necessary.
In terms of architecture, the communications rackmount servers however are quite similar to ATCA servers, Hauser pointed out. Both types are typically equipped with the same chipsets supporting four-core processors, and in contrast to general purpose industrial severs, both types are not equipped with graphics capabilities.
Like Intel, Kontron plans to manufacture the servers in Penang where it runs its own production site. The facility has enough capacity to absorb the additional workload, Hauser said. "This is why we have expanded our Penang capacity. It gives us additional flexibility and creates synergies," the Marketing VP explained.
The move is subject to regulatory review. For Kontron, Intel's Columbia activities will emerge as a new subsidiary in the U.S and it will help to improve Kontron's standing in North America. "It will be a seamless transition", Hauser promised. He declined to elaborate on the financial aspects of the transaction.