Cisco says acquisition of semiconductor company will help it meet customer demand for bigger, faster and more efficient networks
Cisco says it plans to buy semiconductor company Luxtera for $660 million, with the deal expected to close in the third quarter of Cisco’s fiscal year 2019.
Cisco says the Californian based firm’s advanced chips for webscale and enterprise data centres and cloud service providers will help it meet client demand for faster and more efficient networks, in an environment where edge and IoT are driving unrelenting demand for bandwidth.
In Cisco’s view, the incoming and exponentially growing tsunami of internet traffic from emerging distributed applications requires ‘a new era of networking’, to safeguard and improve performance at scale — importantly while keeping costs down.
Luxtera specialises in the development of silicon photonics – chips that combine fibre optics with silicon – switching the traditional electrical wire medium of data transfer. The technology is said to massively increase the speed of data connectivity and Cisco says the combination of its and Luxtera’s capabilities in 100GbE/400GbE optics, silicon and process technology will provide customers with ‘future proof’ networks.
State of the art hardware and silicon and optics investment is at the heart of Cisco’s intent-based networking strategy – a new umbrella term for high-scale networking and security driven by analytics.
“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 VP and GM for Cisco’s networking and security business.
“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.”
Once the deal is closed, Luxtera employees will join Cisco’s optics business under David Goeckeler.