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Broadcom buys PON chip vendor Broadlight

25 April 2012
 
Broadcom is paying $195 million (€146 million) in cash to acquire passive optical network (PON) chip maker BroadLight plus up to $10 million more if performance targets are met.
 
Earlier this month, semiconductor specialist Broadcom completed its acquisition of BroadLight, Inc., a US corporation with an Israel-based subsidiary. Rumours about the acquisition had been circulating for a number of months.
 
Founded in 2000, BroadLight is a privately held provider of integrated networking and passive optical network (PON) processors.  According to analysts at The Linley Group, BroadLight was the third largest supplier of PON interface chips and the leading supplier of GPON components worldwide.  With this acquisition Broadcom takes over those GPON bragging rights.
 
“By acquiring BroadLight, Broadcom becomes the leader for GPON shipments as well as being the overall PON leader,” said Jag Bolaria, senior analyst at The Linley Group. “With future PON growth driven by GPON deployments in China, the US, and emerging economies, this acquisition should produce good returns for Broadcom.”
 
Although Broadcom already had some GPON products, they targeted the optical networking unit – the more cost-sensitive, customer premises side of the connection.  "BroadLight accelerates our time-to-market in GPON, adds important OLT [optical line terminal] products and technology and enhances our longer-term fibre roadmap," explained Dan Marotta, Broadcom's executive vice president and general manager, Broadband Communications Group.
 
Broadcom appears to have a voracious appetite for acquiring Israeli based start-ups: Broadlight is its tenth such purchase.  In February Broadcom completed the $3.7 billion acquisition of Netlogic Microsystems.  Previous acquisitions in optical communications include EPON chip maker Teknovus in August 2010 and Dune Networks, a developer of Ethernet switch fabrics, in 2009.
 
By Pauline Rigby