Loading...
News Article

Cicso targets silicon photonics with $2.6 billion Acacia bid

News

Cisco has revealed plans to acquire Massachusetts-based Acacia Communications, its supplier of optical interconnects, in a deal valued at $2.6 billion.

Under the terms of the agreement, which if approved will see Acacia become part of Cisco’s optical systems and optics business unit under executive VP David Goeckeler, the Silicon Valley telecoms heavyweight will pay $70 per share in cash to complete the deal.

Cisco says it plans to support Acacia’s existing and new customers looking to combine coherent optics with digital signal processing, photonic integrated circuit (PIC) modules, and transceivers for use in both long-haul networks and data centers.

Increasing capacity; driving down cost

News of the Acacia deal comes just a few months after Cisco completed its acquisition of the silicon photonics developer Luxtera for $660 million, with the intention of incorporating the technology into its data centers and other networking systems.

“With the explosion of bandwidth in the multi-cloud era, optical interconnect technologies are becoming increasingly strategic,” said Goeckler in a Cisco release announcing the latest deal. “The acquisition of Acacia will allow us to build on the strength of our switching, routing and optical networking portfolio to address our customers’ most demanding requirements.”

In a blog post explaining the rationale behind the move Bill Gartner, Cicso’s VP of optical systems and optics, wrote that the three primary challenges for cloud and service providers across the various networking platforms were now to increase capacity within the existing fiber-optic infrastructure; drive down the cost-per-bit ratio; and to increase the level of automation.

“Solutions to these challenges will drive significant architectural shifts for service providers,” Gartner noted. “A key trend in this segment is the migration from chassis-based solutions to pluggable optics. Functions that were traditionally delivered in separate chassis-based solutions in a separate optical layer will be available in a pluggable form factor as part of the IP layer – offering significant benefits for network operators in terms of operational simplicity and lower cost.”

Gartner added that Acacia’s coherent optics technology would be part of the solution to meeting escalating consumer demand for data.

“In addition, Acacia uses silicon photonics as the platform for integration of multiple photonic functions for coherent optics,” he continued. “The greater levels of integration increase the density and reduce the cost of the coherent optics.

“Leveraging the advances in silicon photonics, each new generation of coherent optics products has enabled higher data transmission rates, lower power and higher performance than the one before.”

Pluggable coherent optics

Acacia’s own CEO, Raj Shanmugaraj, described coherent optics technology as a “game-changer” for optical networking, adding that the deployment of pluggable coherent optics would build on that impact.

“Upon close, Cisco and Acacia will continue to serve and support existing Acacia customers,” he stressed – confirming that the integration within Cisco would not stop it from working with third parties. “By integrating Acacia technology into Cisco's networking portfolio, we believe we can accelerate the trend toward coherent technology and pluggable solutions while accommodating a larger footprint of customers worldwide.”

If all goes according to plan, the acquisition should close in early 2020, assuming regulatory approvals are cleared.

Following the announcement, Acacia’s stock price jumped in value by around 35 per cent, to trade at just below the $70 price agreed with Cisco.

Co-founded by CTO Benny Mikkelsen, VP of digital signal processing and optics Christian Rasmussen, and VP of hardware and software Mehrdad Givehchi, Acacia listed on the Nasdaq exchange in 2016, following an IPO at $23 per share.

In 2018, Acacia posted a net income of only $5 million, as sales dipped 12 per cent on the prior year’s total, to $340 million. However, the firm enjoyed a strong start to 2019, comfortably beating its sales guidance for the opening quarter of the year.

Quintessent appoints Bob Nunn chief operating officer
PI to demonstrate new PIC alignment system at Photonics West
Drut launches 2500 product series with CPO for AI datacentres
III-V Epi advocates GaAs for new lasers
Marvell announces new CPO architecture for custom AI accelerators
Printing high-speed modulators on SOI
Photon IP raises €4.75m for advanced PICs
ANELLO Photonics launches Maritime Inertial Navigation System
Aeluma joins AIM Photonics as full industry member
Imec makes breakthrough with GaAs lasers on silicon
POET acquires Super Photonics Xiamen
Voyant Photonics launches affordable Carbon LiDAR
Penn State makes breakthrough in photonic switching
New nanocrystals could lead to more efficient optical computing
QCi awarded NASA contract to apply Dirac-3 photonic optimisation solver
The Netherlands launches ChipNL Competence Centre
TOPTICA to create chip-integrated lasers for quantum PIC project
NSF selects six pilot projects for National Quantum Virtual Laboratory
SiLC Technologies launches Eyeonic Trace Laser Line Scanner
Southwest Advanced Prototyping Hub awarded $21.3 million CHIPS Act funding
Cambridge Graphene Centre and CORNERSTONE to participate in PIXEurope
Cost-effective lasers for extended SWIR applications
IBM unveils co-packaged optics technology for AI and datacentres
QCi announces $50 million concurrent stock offerings
CHIPS Act funding to be awarded to Coherent, Skywater, and X-Fab
ERC consolidator grant awarded for optoacoustic neural network project
Imec demonstrates InP chiplet integration on 300 mm RF silicon interposer
Ayar Labs raises $155 million for optical I/O
Celestial AI awarded 2024 Start-up to Watch by Global Semiconductor Alliance
Researchers develop “last missing piece” of silicon photonics
Quantum sensors for controlling prosthetics
UPVfab to participate in European Commission photonic chips project

×
Search the news archive

To close this popup you can press escape or click the close icon.
Logo
x
Logo
×
Register - Step 1

You may choose to subscribe to the PIC Magazine, the PIC Newsletter, or both. You may also request additional information if required, before submitting your application.


Please subscribe me to:

 

You chose the industry type of "Other"

Please enter the industry that you work in:
Please enter the industry that you work in: