FEBRUARY 26, 2007 By Meghan Fuller -- Cortina Systems (search for Cortina Systems) today announced its acquisition of Immenstar (search for Immenstar), developer of network-on-chip (NoC) technology that enables system vendors to provide voice, video, and data over PONs. According to Cortina, the Immenstar acquisition simultaneously builds on the strength of its existing technology and expands its reach into the access network. Financial terms of the deal were not disclosed.
The Immenstar acquisition follows Cortina's September 2006 acquisition of Intel's Optical Networks Division (see "Cortina acquires assets of Intel's optical component business"), through which it acquired Ethernet media access controllers (MACs) and physical layer devices (PHYs), as well as Intel's entire portfolio of transport and service framers, optical transport forward error correction (FEC) framers, and T1/E1 line interface products. Cortina Systems also purchase Azanda Network Devices in 2005, from which it nabbed traffic management expertise.
"The next entry point was to go to the access," says Cortina Systems' president and CEO Amir Nayyerhabibi, "and in that arena, we essentially saw our opportunity to enter into the broadband market." He believes Cortina already has "some compelling pieces of those technologies" within the company, namely its analog capabilities. "We have a device that enables us to do 2.5 Gig both up and down in the burst mode, which is one of the most difficult pieces of technology required for PON," he says.
According to Nayyerhabibi, Cortina mulled the idea of developing access technologies in-house, but ultimately decided to acquire that technology instead.
"Could we develop it internally? Certainly," says Nayyerhabibi. "We have all the expertise to do that, but there are so many demands on us with a variety of designs from our customers that we thought this would be the fastest way to get to market and lead it."
As for the choice of Immenstar--which was among a group of three or four potential acquisitions Cortina considered--Nayyerhabibi says both the company's products and its development philosophy were a good fit. "They went into the market looking at it more in terms of 'How do you deliver bandwidth in a way where people can really manage it and make decisions on how that bandwidth is being delivered?' he explains.
Immenstar's portfolio includes technology that enables both switching and per-customer delivery of bandwidth. Cortina plans to integrate this technology with the quality-of-service (QoS) and traffic management expertise it acquired from Azanda to develop what it calls 'subscriber-based bandwidth management,' which Nayyerhabibi says is "key to winning a huge set of customers."
Nayyerhabibi confirms that Cortina spoke with its customers before acquiring Immenstar, both as part of its due diligence and to gauge the market's interest. At least three of the company's major customers in China are "really endorsing this," he says, adding that several of Cortina's biggest Japanese customers also are on board.
Meeting worldwide demand
For its part, Cortina says it fully intends to become "a leading player" in both the EPON and GPON markets. (Immenstar's Turandot chipset is dual-mode; it allows system vendor customers to play in both the EPON and GPON markets by enabling a unified design and development process that they can leverage across both product portfolios.)
Nayyerhabibi says the EPON market remains strong, thanks to the Japanese carriers' preference for the technology. He admits that "it's a little early for GPON," though he says he's been in discussions with major North American players who have expressed "tremendous interest." Nayyerhabibi believes the European market will lean toward GPON as well.
As for China, Nayyerhabibi calls it "a wild card. The thing that is interesting about China is China really plays to the technologies that proliferate," he notes. "I think they are hedging their bets and will probably deploy both."
Either way, Cortina says its acquisition of Immenstar provides it with flexible technology to meet the market's fluctuating requirements. "The architecture lends itself to both GPON and EPON. Whether its going to be in the form of a single chip or a variety of chips is something we will determine after the acquisition. But I think the architecture will put no limitation on what we can do," Nayerhabibi contends.
Immenstar's Santa Clara, CA-based headquarters, which housed the bulk of its engineering team, will be moved to Cortina's new facility in Sunnyvale. Immenstar recently opened a new facility in Shanghai, which will remain open and house both engineering and applications engineering. Cortina also will continue to operate its existing sales and support office in Shenzhen, giving it two facilities in China, "for the time being," Nayyerhabibi says.