Cisco Systems is negotiating to acquire Luxtera, an optical chip maker, according to Bloomberg. The networking giant apparently beat out Intel and Broadcom for the right to pursue a deal -- though a buyout agreement may not materialize, the report says.
Updated December 17, 2018: Cisco has confirmed the Luxtera acquisition.
Luxtera, founded in 2001, specializes in silicon photonics -- the use of a standard semiconductor wafer foundry to produce optical-electrical transceiver products. Those products, in turn, can move large amounts of data at high speeds over long distances, the company says.
Luxtera's products typically surface in hyperscale data centers, enterprise networks and mobile infrastructure, the company says.
Cisco publicly endorsed Luxtera's technology in 2016, when the optical chip maker reached a particular one-million unit product shipment milestone. At the time, Cisco VP Bill Gartner said:
“Cisco is always looking for the best possible optics for use in its systems, and silicon photonics has long been seen as a critical element for 100G systems. Luxtera’s 100G-PSM4 products complement Cisco’s focus on delivering high density 100G solutions offering disruptive opportunities for our customers.”
The alleged Cisco-Luxtera negotiations surface during a key time. On the one hand, Cisco CEO Chuck Robbins is striving to boost recurring revenue and software-driven subscription services. But on the other hand, the company needs to continually strengthen its core networking equipment -- especially as open source-driven network developments potentially cannibalize the traditional network market. Luxtera could deliver key technologies for that network effort.