Intel has agreed to acquire the tunable laser business of New Focus Inc. to jump-start its development of lower cost optical network equipment.
The purchase for about US$50 million in cash will enable the chip maker to build smaller, less expensive optical transceivers, which are used to deliver data over telecommunication networks, Intel said in a statement.
Specifically, the tunable lasers allow these optical transceivers to increase the bandwidth in existing fiber networks using DWDM (dense wavelength division multiplexing). Through the use of hardware and software, DWDM divides a single light wave traveling over optical fibers into as many as 80 individual wavelengths, each of which can carry 10G bits per second (bps) of data.
Intel aims to lower the cost of DWDM equipment that allows service providers to add bandwidth to their optical networks without adding new fiber, a process called dynamic provisioning.
As a result of the acquisition, 40 employees from New Focus have joined Intel's communications group and will work in Newark, California, the company said.
Additionally, Intel said it will license its own optical technology to New Focus and supply the company with certain products that are developed with the technology.
New Focus, based in San Jose, California, said it will continue its business developing products for use in the testing and measurement market. In the past month the company also agreed to sell its passive optical component product line to Finisar Corp., in Sunnyvale, California, for $12.8 million.