Chip giant Intel has bought a laser technology unit from specialist firm New Focus for $50m in cash.
The deal, which will see 40 staff transfer from New Focus, will enable Intel to develop small form factor, low-cost tuneable optical transceivers to accelerate the deployment of dense wavelength division multiplexing (DWDM) equipment, the company said.
"This acquisition augments the significant optical networking business that Intel has built over the past several years," explained Gordon Hunter, vice president, Intel Communications Group.
In the current market, network service providers are struggling to meet the growing demand for bandwidth from customers while operating within very tight capital expense budgets, he said.
DWDM equipment addresses this problem by separating light waves that travel over existing optical fibres into as many as 80 individual wavelengths.
Each is capable of carrying 10 gigabits of data per second, effectively expanding the available bandwidth of the current fibre infrastructure by up to 80 times.
Intel will license technology and supply certain products to New Focus in return, Hunter said.
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