TranSwitch Corp., a semiconductor company that was known for SONET, but recently moved into passive optical networking, had agreed to acquire Centillium Communications, a fellow chip maker that was known primarily for DSL and VoIP products, but recently has been able to capitalize on the PON market. The $42.8 million cash deal also unites two companies that have more in common than recent PON moves; Light Reading reports that neither company has had a profitable year among the last eight years, and a story at EETimes described the firms as "somewhat struggling."
Still, TranSwitch said the combined company will aim for profitability by the first quarter of 2009. The buyout comes several months after Centillium sold its DSL chip business to Ikanos Communications, a move that it said at the time would allow it to focus on optical and VoIP efforts. Since then, Centillium has made progress in the PON market, having won an Ethernet PON deal with NTT. Meanwhile, TranSwitch's PON efforts have been focused on Gigabit PON.