Cisco announces intent to acquire silicon photonics company Luxtera
With Internet traffic set to increase three fold in five years, the acquisition will strengthen Cisco's integrated photonics portfolio.
Cisco (NASDAQ: CSCO; San Jose, CA) announced the intent to acquire privately held Luxtera (Carlsbad, CA), a semiconductor company that uses silicon photonics to build integrated optics capabilities for webscale and enterprise data centers, service provider market segments, and other customers. Luxtera says its technology, design, and manufacturing innovation significantly improves chip scale and performance, while lowering costs. Cisco plans to incorporate Luxtera's technology across its intent-based networking portfolio, spanning enterprise, datacenter and service provider markets.
"With Cisco's 2018 Visual Networking Index projecting that global Internet traffic will increase threefold over the next five years, our customers are facing an exponential demand for Internet bandwidth," said David Goeckeler, executive vice president and general manager, Networking and Security Business at Cisco. "Optics is a fundamental technology to enable this future. Coupled with our silicon and optics innovation, Luxtera will allow our customers to build the biggest, fastest and most efficient networks in the world."
Cisco will pay $660 million in cash and assumed equity awards for the acquisition of Luxtera. The acquisition is expected to close in the third quarter of Cisco's fiscal year 2019, subject to customary closing conditions and required regulatory approvals.
The acquisition will:
1. Future-Proof Networks for Emerging Applications: The emerging class of distributed cloud, mobility, and IoT applications is creating an unprecedented strain on existing communications infrastructure. The combination of Cisco's and Luxtera's capabilities in 100GbE/400GbE optics, silicon, and process technology will enable customers to build future-proof networks optimized for performance, reliability, and cost.
2. Expand Cisco's 100GbE and 400GbE Portfolio: Integration of Luxtera and Cisco's optical transceiver portfolio will broaden Cisco's offering of 100GbE and 400GbE optics. As system port capacity increases from 100GbE to 400GbE and beyond, optics plays an increasingly important role in addressing network infrastructure constraints, particularly density and power requirements.
3. Report into David Goeckeler: Upon completion of the transaction, Luxtera employees will join Cisco's Optics business under David Goeckeler, executive vice president and general manager, Networking and Security Business.