Cisco buys 10 Gbps silicon technology for $150m

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Cisco Systems is to buy AuroraNetics, a developer of 10 gigabits per second (Gbps) silicon technology for metropolitan fiber networks. Cisco stock worth up to $150 million will be exchanged for all outstanding shares of AuroraNetics.

AuroraNetics’ 52 employees based in San Jose, California, and led by CEO, Nader Vasseghi, will join Cisco's public carrier IP services group.

Cisco expects a one-time charge for purchased in-process research and development expenses not to exceed $0.01 per share. The acquisition has been approved by the board of directors of each company and is subject to various closing conditions.

AuroraNetics' silicon technology is used in data-optimized fiber rings known as resilient packet rings (RPR.) RPR offers service providers the ability to create high-speed metropolitan networks to transport significant amounts of IP and other data, including Ethernet.

RPR also provides customers with the intelligence of an IP network combined with the redundancy benefits of traditional Sonet networks. RPR ensures that IP traffic travelling on fiber rings can be quickly restored in the event of a fiber cut.

Cisco plans to license AuroraNetics' silicon design to companies interested in the development of 10Gbps SRP RPR-based solutions. Licensing AuroraNetics' design augments Cisco's existing licensing of 2.5Gbps SRP silicon and will help accelerate industry availability of 10Gbps RPR products.

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