Chelsio Communications has slashed the price of Ethernet with a new 10Gbit/s network interface card for just $2,000 - a third of the average price.

The low-priced card marks a continuing price decline that should encourage customers to embrace the high-speed technology. A fibre-based N100 server adapter, it is half the size and 60 percent less expensive than competitive products, Chelsio says.

Gartner says the average price of a 10Gig NIC is about $6,000, while cheaper NICs tie in with earlier reports of falling prices on 10Gig switch ports.

In addition to accelerating network connections, Chelsio's new offering can speed processing by offloading TCP/IP computations from servers, the company says. The product, which runs on Linux, Unix and Windows machines fitted with PCI-X slots, was launched last week at LinuxWorld Expo in San Francisco.

The N100 is based on chip technology from Chelsio's T100 host bus adapters for iSCSI storage networking, but is half the size of the T100, which means it can be deployed on smaller servers and it is easier to install multiple cards in one box, the company said.

Chips on the N100 let the NIC take over TCP/IP packet processing from the server's CPU, so the server can focus on running applications and the operating system. Each card can handle up to 64,000 simultaneous TCP/IP connections, 52 percent better than competing 10Gig Ethernet NICs from S2IO and Intel - the other two vendors with 10Gig Ethernet NICs on the market.

Gartner says the number of 10Gig cards installed will jump from about 7,000 this year to 550,000-plus by 2007. Large organisations consolidating servers will be driving this growth, the research firm says. By 2007, the average price for a 10Gig NIC will drop to about $,3100, partly as a result of their fibre components becoming less expensive, Gartner says.

The emergence of a copper 10Gig standard, expected in 2005, also will drive down price, although it will also shorten the range.