Cisco to Buy Lightwire for $271M

Cisco Systems Inc. (Nasdaq: CSCO) said Friday it will pay about US$271 million in cash and retention-based incentives for Allentown, Penn.-based Lightwire Inc. , which makes optical interconnects for high-speed networking applications. (See Cisco Shells Out $271M for Lightwire .)

The technology allows for routers and switches to connect at higher densities using silicon photonics technology, which lowers the overall cost of the devices.

For a more thorough explanation of what Lightwire does and how its technology works, see Craig Matsumoto's story: Lightwire Debuts Its Silicon Photonics.

Why this matters
In a prepared statement, Ned Hooper, Cisco's chief strategy officer, said Lightwire fits in with Cisco's other optical ambitions: "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."

For more
— Phil Harvey, Editor-in-Chief, Light Reading

Rush21120 12/5/2012 | 5:41:31 PM
re: Cisco to Buy Lightwire for $271M

Cisco is way behind competitors with integrated optics.  Most of their (Cisco) Ethernet products lack modern day SFF optics at 10GE or above.  This is a catch up story not leap ahead disruptive technology story.

southernlight 12/5/2012 | 5:41:29 PM
re: Cisco to Buy Lightwire for $271M

Rush, could you possibly provide us with a single, specific example of a Cisco "Ethernet product" that lacks "modern day SFF optics at 10GE or above" (I suppose you meant SFP)?  Thanks in advance.

Rush21120 12/5/2012 | 5:41:28 PM
re: Cisco to Buy Lightwire for $271M

Sl, no I meant Small Form Factor, or the MSA for pluggable optics.  4900M (x2), 4924 (x2), 4948 (x2).  There are also short coming on thermals for XFP, limited SFP+ support.  Cheers.

Rush21120 12/5/2012 | 5:41:27 PM
re: Cisco to Buy Lightwire for $271M

For Cisco, its about exclusivity.  They must feel LW has something that no one else has or else it shores up a supply chain for them.  The interesting question would be 'Is Cisco having supply chain issues with/without margin threat?'.  As far as I knew, their optics made HUGE margins and Cisco optics still demand a premium and for the most part are locked.

Pete Baldwin 12/5/2012 | 5:41:27 PM
re: Cisco to Buy Lightwire for $271M

You know, I neglected to mention, separately ... this ties in with the vertical integration theme we'd written about a couple of years ago.


Pete Baldwin 12/5/2012 | 5:41:27 PM
re: Cisco to Buy Lightwire for $271M

Rush -- interesting point. I suppose Lightwire could help at 10G, but talking to Cisco, they want to go straight for 40G and 100G with this.

I can understand that. Power, size and price are all going to be pretty big issues at 100G for a while.

I wonder, though... if they started using it for 10G, how much more (or different) of an investment would that take, considering Lightwire apparently hadn't gotten to a commercially viable point yet.

Sign In