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Business News – Cisco Takes Over Key Chip Maker

Posted: 04/2000

Business News

Cisco Takes Over Key Chip Maker
BY CHARLOTTE WOLTER

Strengthening its service provider infrastructure expertise, Cisco Systems Inc.
(www.cisco.com) has acquired integrated circuit (IC) design firm Growth Networks Inc., a leader in a new category of telecommunications silicon, Internet switch fabrics.

The deal is worth about $335 million in Cisco common stock, which will be exchanged for all outstanding shares, warrants and options of Growth Networks
(www.growthnetworks.com). The “pooling of interests” is expected to close during the fourth quarter of Cisco’s fiscal year 2000.

According to market research firm Current Analysis, Inc.
(www.currentanalysis.com), “This acquisition provides Cisco with not only high-capacity switch-fabric technology, but also the architectural expertise for designing next-generation switches and routers. The acquisition is of high importance to Cisco, as the company needed to address scalability and capacity issues in its core router line.”

Current Analysis’ report on the deal says Cisco now has the capabilities to take service provider network capacities to the performance levels needed to converge voice, video and data.

Growth Networks’ Internet Switching Fabric interconnects input and output ports within high-end switches and routers. The technology will help create a foundation for next-generation networks and enable service providers to meet critical requirements such as scalability, flexibility, multiservice support and quality of service (QoS). It also enables scalability from tens of gbps to tens of terabits per second (tbps).

Growth Networks’ technology complements Cisco’s earlier acquisition of Stratum One Communications. The two companies provide Cisco extensive expertise in semiconductor design and silicon integration.

 


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