Cisco In Negotiations to Acquire Luxtera


Luxtera has been in the limelight since the news of acquisition by Cisco came out. Though there are no official statements from either Cisco or Luxtera, the industry has started discussions based on the reporting by leading newspapers. According to the people watching closely the movements of acquisition, the biggest telecommunication network equipment maker, Cisco Systems Inc., is in talks to purchase optical chip technology company Luxtera Inc., No price information has been revealed and the since the talks are held privately, but sources close to the matter guess a few hundreds of millions of dollars. The negotiations are held confidentially and came to know only that Cisco could beat out bids from rivals such as Intel Corp. and Broadcom Inc.,


Luxtera’s optical transceivers serve Hyperscale datacenters, enterprise market, and mobile infrastructures. The company headquartered in Carlsbad, California has a revenue of US$ 9 million in 2018 (estimated). Luxtera is a fabless semiconductor company that designs and builds front panel and embedded optical modules based on its silicon photonics technology. Luxtera’s top competitor is Ranovus, another transceiver maker.

Luxtera develops silicon photonics technology, a way of converting information encoded into photons and carried over fiber optic cables directly into semiconductors, that greatly speeds the transfer of data. Other equipment is usually needed to turn light from fiber optic cables into the electronic signals needed to run computers. Luxtera says it can make a high volume of chips that can do that job, something that’s eluded other companies in the industry for years. Adding that technology would give Cisco more capabilities in the components it uses to build networking machinery. The company has struggled to rekindle growth amid an industry-wide migration to cheaper machinery that uses open-source software. Luxtera could give it a more fundamental technology to differentiate its products.

Cisco Systems Inc. has an annual revenue of more than US$49 billion. Cisco’s worldwide sales and marketing departments consisted of approximately 25,200 employees. Cisco may be looking for more fundamental technology that could differentiate its products. Under Chief Executive Officer Chuck Robbins, Cisco has also expanded into software and networking services to lessen its dependence on proprietary hardware and software combinations.

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