Intel has signed a definitive agreement to acquire Fulcrum Microsystems Inc., a privately held fabless semiconductor company that designs Ethernet switch silicon for data center network providers.

"Fulcrum Microsystems's switch silicon, already recognized for high performance and low latency, complements Intel's leading processors and Ethernet controllers, and will deliver our customers new levels of performance and energy efficiency while improving their economics of cloud service delivery," said Kirk Skaugen, Intel vice president and general manager, Data Center Group.

10 Gigabit Ethernet (10GbE) networks are one of the fastest-growing market segments in the data center today. As demand for data continues to increase, there is a growing need for high-performance, low-latency network switches to support evolving cloud architectures and the growth of converged networks in the enterprise. Fulcrum Microsystems designs integrated, standards-based 10GbE and 40 Gigabit Ethernet (40GbE) switch silicon that have low latency and workload balancing capabilities.

Intel is expected to offer networking hardware as part of its cloud computing services, which are powered by technologies based around Intel Xeon processor solutions.

Additional terms of the transaction were not disclosed. The agreement is expected to close in the third quarter of 2011.