Intel Shifts Optical Storage Biz to Emcore

Intel carved off more of its optical assets today, announcing a deal to sell the enterprise and storage elements of its optical platform division, as well as its connects cables business, to semiconductor specialist Emcore.

Emcore will issue 3.7 million shares of restricted stock for the acquisition, with certain adjustments based on the stock price 12 months after the transaction closes.

Last night, Emcore stocks closed at $6.96.

In a statement released this morning, Emcore described the deal as a way to boost its presence in the 10 Gbit/s Ethernet and SAN transceiver markets.

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,” said Reuben Richards, the Emcore executive chairman.”Intel’s cables business, specifically, will bolster Emcore’s HPC efforts, according to the exec, who expects the deal to be worth $45 million in revenue over the next 12 months.

”[This] provides an innovative solution for high-performance computing cluster interconnect applications, using embedded parallel optical transceivers with a multi-mode fiber ribbon,” he said, describing the cables business as the “fastest growing segment” of the acquired assets.

Today’s deal follows the recent sale of the telecom-related part of Intel’s optical division to Emcore for $85 million, underlining the chip vendor’s desire to refocus its efforts on silicon.

”The sale of these optical-related assets will enable Intel to focus its investments on core communications and embedded market segments in line with its platform strategies,” explained Intel, in a statement this morning.

Today’s transaction is expected to close in the second quarter of this year.Have a comment on this story? Please click "Discuss" below. If you'd like to contact Byte and Switch's editors directly, send us a message.