Cisco to acquire Israeli network IC vendor for $320M

Cisco Systems said it would acquire Leaba Semiconductor, a venture-backed fabless networking chip vendor based in Israel, for $320 million.

Leaba is an early stage startup that had been operating in stealth mode. The acquisition was announced Wednesday in a blog posting by Rob Salvagno, head of Cisco’s M&A and venture investment team.

Salvagno said the acquisition would advance Cisco’s innovation strategy. “By combining Leaba’s semiconductor expertise with the Cisco engineering team, we will accelerate our plans for Cisco’s next generation product portfolio and bring new capabilities to the market faster,” Salvagno wrote.

Salvagno described Leaba as “a team with a strong and successful track record of designing leading edge networking semiconductors” to address network infrastructure challenges.

Leaba did not immediately respond to a request for more information from EE Times.

Cisco’s Leaba acquisition would further the accelerating wave of mergers and consolidation in the semiconductor industry, which shows no sign of letting up. Last year, the total value of semiconductor industry acquisitions announced eclipsed $105 billion, which according to market research firm IC Insights Inc. was more than eight times the average annual value of acquisitions by semiconductor companies over the previous five years.

The Leaba acquisition was the second deal announced by Cisco this week. On Tuesday, Cisco (San Jose, Calif.) announced it would acquire Cliqr Technologies Inc., a privately held vendor of application-defined cloud orchestration platforms. Financial terms of the Cliqr acquisition were not disclosed.

Also this week, Cisco announced that it is shipping the first 16nm ASICs in switches that are part of new data center products. Cisco maintains that the ASICs leapfrog features offered by rival Broadcom, whose 28nm chips are used in switches made by Cisco and its competitors.