Intel buys Giga AS for $1.25 billion

Further signs that Intel is deadly serious about being the future building block company for the Internet has emerged after the company said it has bought Danish company Giga AS for $1.25 billion in cash. Intel is putting together a massive Internet construct, using takeovers to help it create additional building blocks, which like Lego bricks will all fit together. That puts it further on course for attacking the market share of firms like Nortel, which yesterday made a similar acquisition. Giga, a subsidiary of NKT, makes high performance network chips for fibre optic communications. In particular, Giga makes 2.5 Gbps (OC-48) and 10Gbps (OC-192) products aimed at both telcos and large data comms customers. The optical networking products will tie in with Intel's Level One products, and are also components used in the xDSL and cable markets. Intel claimed that Giga is one of the leading suppliers of silicon for communications, shipping high frequency and mixed signal products to the market. When the acquisition is approved, Giga will become a wholly owned Intel subsidiary, in the embrace of its Level One business. Yesterday Nortel spent $3.25 billion using shares to buy optical networking company Xros, which also supplies OC-192 products. Last December, it spent a similar amount of cash on a startup company, Qtera. Cisco and Lucent too have spent money acquiring companies in the arena. ®