Intel sells off optical and cable divisions

11 Apr 2008

Emcore Corporation is to acquire the telecoms assets of Intel’s Optical Platform Division, as well as Intel’s Connects Cable business, it has been confirmed.

Emcore, which specialises in compound semiconductor-based components and subsystems for the broadband, fibreoptic, satellite and terrestrial solar power markets, will issue 3.7 million shares of restricted stock for the acquisition.

The US company signalled last December that it had reached agreement to buy the telecoms assets of Intel’s Optical Platform Division for US$85m.

“Following the successful acquisition of the telecom-related assets of Intel’s Optical Platform Division, this second acquisition from Intel enables Emcore’s fibre optics to be a significant supplier for both telecom and datacom products,” said Reuben F Richards, executive chairman, Emcore.

“This acquisition will provide additional manufacturing efficiencies through economies of scale and vertical integration, benefiting our enterprise, storage, telecom, cable and high-performance computing customers.”

The assets include IP, inventory, fixed assets and technology relating to optical transceivers for enterprise and storage customers, as well as optical cable interconnects for high-performance computing clusters.

The transaction is expected to close in the second quarter of this year.

The company projects the acquisition will add US$45m in revenue for the next 12 months.

“Customers are driving consolidation and vertical integration in the optical communications market segments,” said Doug Davis, vice-president, Intel Digital Enterprise Group and general manager, Embedded and Communications Group. “We will work together to complete a smooth transition of these businesses, building upon the experience in the telecom optical components acquisition.”

The sale of these optical-related assets will enable Intel to focus on strategic investments in core communications and embedded market segments, the company said.

By Niall Byrne