ACG Research

ACG Research
We focus on the Why before the What

Friday, February 24, 2012

Cisco Acquires Lightwire

Cisco announced the intended acquisition of Lightwire (Allentown, PA) for $271M. The full price includes key retention incentives, and Cisco feels they paid a very fair price for the just under 60 employees as well as the significant intellectual property patents that come with the portfolio.

Lightwire offers a CMOS platform that integrates optical modulators, waveguides and mux/demux functionality into a single CMOS chip. Lightwire competes against companies such as Luxtera and Kotura; we will be speaking to reps from both of these companies next week.

Lightwire has yet to ship product; expectations are for 1H 2013 for the first release, but it will be a key platform to additional releases over the next few years.

The products target the data center and service provider spaces and will enhance routers and switches with very high density, longer reach capability while decreasing the form factor and power requirements. As the number of ports increases, the cost of the optics becomes a larger percentage of the total cost of a solution; therefore, a lower cost, higher density version will be welcome to any data center application of routing and switching. The initial focus for deployment will be 40G/100G and higher bit rates at distances up to about 40km. Solutions today that meet this requirement are very large and power hungry. The Lightwire version is expected to be one-third to one-quarter the size and use much lower power.

ACG believes this is another good purchase for Cisco. While targets are initially for routers and switches, all next-generation platforms will use this device and can begin integration designs today. The CMOS platform is one of the most manufactureable in the world and is a key target for optical and electrical integration for many future platforms. Because of its friendly base, the CMOS is perfect for higher level integration at lower cost points. We expect that by 2015 we'll see all sorts of electrical and optical components integrated into this base platform design in one form or another. Clearly, Cisco sees this as well and is making yet another commitment to build its key next-generation platforms. Two thumbs up from ACG!

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