Cisco adds optical muscle to portfolio with Lightwire acquisition

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Cisco (Nasdaq: CSCO) has made yet another move to bolster its optical capabilities by acquiring Lightwire, a provider of (CMOS) photonics technology vendor.

Cisco headquarters

Cisco headquarters in San Jose, Calif.

Under the terms of the agreement, Cisco will acquire the Allentown, Pa.-based vendor, which has offices located in Santa Clara, Calif., for $271 million.

So what does Cisco gain from this acquisition?

The vendor will use Lightwire's CMOS interconnection technology--which combines high speed active and passive optical functions onto a small chip--to give switches, routers and optical transport products higher-density optical connectivity at a lower cost. It can then pass on these savings to their service provider customers to reduce opex and capex costs, and develop new services such as online video and cloud.

Lightwire is not the first optical silicon vendor Cisco has acquired. In 2010, it acquired optical digital signal processing (DSP) vendor CoreOptics for $99 million to capitalize on the service provider industry's transition to 40G and 100G optical networks.

"The Lightwire acquisition builds on Cisco's existing optical networking expertise and complements Cisco's 2010 acquisition of CoreOptics, a designer of coherent digital signal-processing solutions and application-specific integrated circuits for high-speed optical networking applications," said Ned Hooper, Cisco's chief strategy officer in a statement.

Set to close in Q3 2012, Lightwire's employees will become part of Cisco's Transceiver Modules Group Business Unit and Supply Chain Operations Group. 

Upon the close of the acquisition, Lightwire employees will be integrated into Cisco's Transceiver Modules Group Business Unit and Supply Chain Operations Group. 

For more:
- see the release
- Bloomberg has this article

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