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Cisco's buying spree continues with Leaba Semi acquisition

Posted: 07 Mar 2016 ?? ?Print Version ?Bookmark and Share

Keywords:Cisco? Leaba? network? semiconductor? acquisition?

Cisco Systems Inc. is on a buying spree. This time, the networking giant is targeting Leaba Semiconductor, a venture-backed fabless networking chip vendor based in Israel, for $320 million.

The acquisition was announced last Wednesday in a blog posting by Rob Salvagno, head of Cisco's M&A and venture investment team.

Salvagno said the acquisition would advance Cisco's innovation strategy. "By combining Leaba's semiconductor expertise with the Cisco engineering team, we will accelerate our plans for Cisco's next generation product portfolio and bring new capabilities to the market faster," Salvagno wrote.

Salvagno described Leaba as "a team with a strong and successful track record of designing leading edge networking semiconductors" to address network infrastructure challenges.

Leaba is an early stage start-up that had been operating in stealth mode. In its website, the chip vendor said it develops semiconductors to address "significant infrastructure challenges." According to InfoWorld.com, which quoted information from Israel's Ministry of Economy, the company "specializes in the design of chips for connecting memory, storage, and compute in data centre environments."

Cisco's Leaba acquisition would further the accelerating wave of mergers and consolidation in the semiconductor industry, which shows no sign of letting up. Last year, the total value of semiconductor industry acquisitions announced eclipsed $105 billion, which according to market research firm IC Insights Inc. was more than eight times the average annual value of acquisitions by semiconductor companies over the previous five years.

The Leaba acquisition was the second deal announced by Cisco last week. The San Jose, Calif., company also announced it would acquire Cliqr Technologies Inc., a privately held vendor of application-defined cloud orchestration platforms. Financial terms of the Cliqr acquisition were not disclosed.

Cisco also announced last week that it was shipping the first 16nm ASICs in switches that were part of new data centre products. Cisco maintained that the ASICs leapfrog features offered by rival Broadcom, whose 28nm chips were used in switches made by Cisco and its competitors.

The Leaba acquisition, however, was a rare move for Cisco, which has been focusing on buying software firms that will boost its cloud, security, analytics and IoT capabilities. Cisco's previous buying pattern suggested that the networking giant was strategically shifting its focususing its cash hoardfrom its roots in networking hardware to a business that focused more on services, but the Leaba acquisition only went to show that the company was not yet ready to give up its hardware roots.

- Dylan McGrath
??EE Times U.S.





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