EMCORE to buy telecom portions of Intel's Optical Platform Division

Dec. 18, 2007

DECEMBER 18, 2007 By Stephen Hardy -- EMCORE Corp. has signed a definitive agreement with Intel Corp. to buy the telecom-related parts of Intel's Optical Platform Division for $85 million.

DECEMBER 18, 2007 By Stephen Hardy -- EMCORE Corp. (search for EMCORE) has signed a definitive agreement with Intel Corp. (search for Intel) to buy the telecom-related parts of Intel's Optical Platform Division for $85 million. EMCORE will acquire intellectual property, assets, and technology relating to tunable lasers, tunable transponders, 300-pin transponders, and integratable tunable laser assemblies. The transaction is expected to clear the usual regulatory review and closing conditions in time to close in the first quarter of 2008.

Intel believes the sale will enable it to focus on core communications and embedded market segments in line with its platform strategies. The company says it is exploring "strategic alternatives" for the enterprise-focused part of the division.

The Optical Platform Division itself was largely the result of acquisitions. Intel acquired its tunable laser expertise from New Focus (at a price of $50 million) and Sparkolor Corp. in 2002. It also purchased optical packaging technology from LightLogic for $400 million in 2001. Prior purchases with ties to the optical communications space include GIGA A/S, Cognet, nSerial, and Level One Communications.

"The optical telecom components business continues to be an attractive market opportunity, but we believe this business and its assets are an optimal fit with EMCORE," said Doug Davis, vice president, Intel Digital Enterprise Group, and general manager, Embedded and Communications Group. "The two companies will work together following the close of the transaction to complete a smooth transition of the business."

Intel had already sold the division's Ethernet media access controllers (MACs) and physical layer devices (PHYs), as well as its entire portfolio of transport and service framers, optical transport forward error correction (FEC) framers, and T1/E1 line interface products, to Cortina Systems in September 2006 for $115 million.

"This transaction represents an important step for EMCORE," said Reuben Richards, CEO, EMCORE. "We are excited about this acquisition and the opportunity to continue building upon Intel's leading tunable laser technology, strong product quality, and history of customer service and satisfaction. The acquired assets should drive substantial product cost reduction, and the combined product portfolio should enable EMCORE to gain a greater share of customer spending. EMCORE estimates these assets will generate $65 million of revenue in 2008, and believes this acquisition will accelerate its path to earnings per share profitability as expected in mid-2008."

The new assets could end up as part of EMCORE's Digital Fiber Optic Products group, based in Albuquerque, NM. Steve Krasulick runs this operation as vice president and general manager. EMCORE also has a Broadband Products Group in Alhambra, CA.

Visit Intel

Visit EMCORE