Cisco's Chip Attack
Latest update time：2020-01-12
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In December 1984,
Cisco was founded in the United States.
In 1995, Cisco became the world's largest network equipment manufacturer. In March 2000, Cisco's total market value reached 555 billion US dollars, surpassing Microsoft to become the company with the highest market value in the United States, ushering in its brief moment of glory. However, in the past two years, due to changes in the market environment and the strong entry of new entrants, Cisco's business has been impacted. In this process, Cisco has also begun to seek some new development paths.
In 2019,
Cisco jumped out of its inherent operating ideas and announced that its latest products can be provided through a "classified business model", which also means that these chips can be used in devices other than Cisco.
According to foreign media reports, Cisco has begun to provide switch chips for network equipment of companies such as Microsoft and Facebook. The fact that Cisco's chips can be adopted by other network equipment also proves the strength of Cisco's chips. Behind Cisco's chips, not only is there Cisco's long-term investment in chip research and development, but its acquired chip companies have also provided impetus for Cisco's development.
In 2000,
the rapid expansion of the Internet once made the telecommunications industry crazy.
This craze also made Cisco's sales reach 18 billion US dollars in that year. With a market value of 444 billion US dollars, it became the second largest company after General Electric (505 billion US dollars) and Intel (446 billion US dollars). Influenced by this market, Cisco also chose to expand in that year, and carried out 17 mergers and acquisitions, of which 2 were related to chip companies.
In February 2000,
Cisco acquired Growth Network, the market leader in Internet switching architecture (a new type of network chip), for US$355 million,
acquiring fiber optic semiconductor design and chip integration technology.
In November 2000,
Cisco acquired Radiata, a wireless local area network (WLAN) chip manufacturer, for $295 million. Radiata's product portfolio includes Baseband processors and Radio chips. Using Radiata's semiconductor, radio and modem expertise, Cisco was able to further develop a new generation of wireless networks based on IEEE802.11a.
Since then, from
the bursting of
the Internet bubble
to 2006, the fiber optic communication industry has survived by expanding its scale through corporate mergers and acquisitions and reducing costs through outsourcing production. During this period, Cisco, as a network equipment manufacturer, has carried out multiple mergers and acquisitions around the chips needed for fiber optic equipment.
In July 2001,
Cisco acquired WAN chip manufacturer AuroraNetics for $150 million. It is reported that AuroraNetics specializes in Internet optical network chip technology that provides 10GB data transmission per second. Cisco hopes to use AuroraNetics' technology to design optical fiber equipment products that meet the current market demand for high-speed data traffic.
In May 2002,
Cisco acquired Navarro Networks for $85 million in stock, whose products provided cost-effective savings on Ethernet ASIC components.
In June 2004,
Cisco acquired the technical talents, semiconductors and software of Procket Networks for US$89 million. The 130 technical talents involved in the Procket Networks acquisition are expected to strengthen Cisco's router and chip research and development capabilities.
In May 2005,
Cisco announced that it had completed the acquisition of Vihana, a Sunnyvale, California-based developer of custom ASICs for computer and communications applications. The acquisition of Vihana will make the programmable ASICs in Cisco products more flexible; at the same time, Vihana's technology will also help integrate the various technology groups and platforms within Cisco Systems.
In March 2007,
Cisco Systems announced plans to acquire Spans Logic, a startup company that specializes in chips that accelerate network processing. Through this acquisition, Cisco will be able to solve the bottleneck problem of packet processing encountered in high-speed transmission in the past, and can also develop more valuable technologies to support the Cisco SONA architecture.
In September 2014,
Cisco acquired Memoir Systems, a leading provider of memory intellectual property (IP) licenses for application-specific integrated circuit (ASIC) chips. These tools enable ASIC vendors to build programmable network switches at a faster pace. The acquisition will make affordable fast memory available to existing Cisco switch ASICs and help drive Cisco ASIC innovation for next-generation IT requirements.
In March 2016,
Cisco acquired Israeli chip designer Leaba Semiconductor for $320 million. The Leaba team has a strong track record of success in designing leading network semiconductors that provide innovative solutions to major infrastructure challenges. This acquisition advances Cisco's innovation strategy, supports the continued differentiation of Cisco products, and achieves the goal of providing customers with best-in-class solutions. By combining Leaba's semiconductor expertise with the Cisco engineering team, Cisco will accelerate plans for Cisco's next-generation product portfolio and bring new features to market faster. Cisco's sale of its network chips, mentioned at the beginning of the article, is thanks to Leaba in this acquisition.
Cisco's crazy acquisitions have never stopped. In the past two years, Cisco has made 12 acquisitions or intended acquisitions, three of which were chip-related.
In December 2018,
Cisco announced plans to acquire semiconductor company Luxtera for $660 million in cash and equity. Luxtera is a semiconductor company that uses silicon photonics to build integrated optical capabilities for webscale and enterprise data centers, service provider segments, and other customers. Luxtera's technology, design, and manufacturing innovations have greatly improved chip scale and performance while reducing costs. Cisco plans to integrate Luxtera's technology in its intent-based networking portfolio, covering the enterprise, data center, and service provider markets.
In July 2019,
Cisco acquired Acacia Communications for $2.6 billion in cash. The two companies said that when the transaction is completed, Acacia employees will join Cisco's optical systems and business units. Acacia Communications is a public fabless semiconductor company based in Maynard, Massachusetts. Acacia develops, manufactures and sells high-speed coherent optical interconnect products that are designed to transform communication networks by improving performance, capacity and cost. With Acacia's products, Cisco is building an industry-leading portfolio of optical, silicon and software technologies to advance network development.
In December 2019,
Cisco planned to acquire Exablaze for an undisclosed price to continue building its internal electronic tools. Exablaze is an Australia-based designer and manufacturer of advanced network equipment that is committed to reducing latency and improving network performance. Integrating Exablaze's innovative products and technologies into the Cisco portfolio provides the latest field programmable gate array (FPGA) technology, giving them the flexibility and programmability they need. According to relevant reports, Cisco's acquisition of Exablaze is intended to deploy its next-generation network architecture, with the goal of being able to handle 5G workloads, artificial intelligence and machine learning, and edge computing. Cisco said in a statement that Exablaze will be integrated into the company's Nexus switching portfolio. Cisco plans to use Exablaze in areas such as high-frequency trading, financial services, high-performance computing, and AI and machine learning clusters.
From the Internet era to the artificial intelligence era, network equipment plays an indispensable and important role. In this process, Cisco is also facing challenges and changes. From the chip companies acquired by Cisco over the years, Cisco has accumulated some ASIC strength. At the same time, according to relevant media reports, Cisco's competitor Juniper also revealed in 2018 that the company will also develop ASIC chips.
In addition, both companies have also made some arrangements on silicon photonic chips. Cisco acquired Lightwire and Luxtera in 2012 and 2018 respectively, showing the industry its determination in the field of silicon photonics; Juniper acquired Aurrion in 2016 to lay out silicon photonic chips. (Silicon photonic chips are
the most common type of
photonic chips
. They use semiconductor light-emitting technology and are favored by many communications companies. They are considered to be the leading technological force in the "post-Moore era.")
Although these chips can only be used in their own devices, perhaps one day in the future, changes in the way they are sold may affect changes in this industry.
*Disclaimer: This article is originally written by the author. The content of the article is the author's personal opinion. Semiconductor Industry Observer reprints it only to convey a different point of view. It does not mean that Semiconductor Industry Observer agrees or supports this point of view. If you have any objections, please contact Semiconductor Industry Observer.
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