Cisco will acquire privately-held Luxtera, a semiconductor company based in Carlsbad, California. Cisco will pay $660 million in cash and assumed equity awards for the acquisition of Luxtera – a company that uses silicon photonics to build integrated optics capabilities for webscale and enterprise data centers, service provider market segments, and other customers.
Luxtera’s technology, design, and manufacturing innovation would significantly improve chip scale and performance, while lowering costs. Cisco plans to incorporate Luxtera’s technology across its intent-based networking portfolio – spanning enterprise, data center and service provider markets.
The emerging class of distributed cloud, mobility, and IoT applications is creating an unprecedented strain on existing communications infrastructure, stated Cisco. The combination of Cisco’s and Luxtera’s capabilities in 100 Gigabit Ethernet (GbE)/400GbE optics, silicon, and process technology would enable users to build future-proof networks optimized for performance, reliability, and cost.
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.
‘Global Internet Traffic Increases Threefold’
“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, 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.”
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 would play an increasingly important role in addressing network infrastructure constraints, particularly density and power requirements.