SDN FEATURE NEWS

Broadcom to Buy, Sell Brocade

By Paula Bernier November 03, 2016

Broadcom made news on two fronts today. First, the company said that it is buying Brocade for $5.5 billion. Second, it revealed its intention to sell Brocade’s IP Network business.

The thinking behind the acquisition, which includes $5.5 billion cash and the assumption of $400 million in debt, is that it will improve Broadcom’s position in the enterprise storage connectivity space. “With deep expertise in mission-critical storage networking, Brocade increases our ability to address the evolving needs of our OEM customers,” said Broadcom President and CEO Hock Tan. “In addition, we are confident that we will find a great home for Brocade’s valuable IP networking business that will best position that business for its next phase of growth.”

That deal will be funded in part by the selloff of Brocade’s assets in the wireless and campus networking, data center switching and routing, and software arenas. That includes the assets San Jose, Calif.-based Brocade got via its $1.5 billion acquisition of Ruckus Wireless just earlier this year. In fact, last September Brocade was named a wireless local area network leader in the IHS Markit Wireless LAN Infrastructure Vendor Scorecard – 2016.

Broadcom sells semiconductor connectivity solutions used in wired infrastructure, wireless communications, enterprise storage and industrial applications. Cisco, HPE, and Intel are its largest customers. And the company is ranked No. 4 in terms of semiconductor sales, according to anysilicon.

The move by Broadcom to acquire Brocade follows a long wave of acquisitions that have been moving the chip industry.

Just last week, for example, Qualcomm announced it will be acquiring NXP Semiconductors NV for $38 billion. NXP sells semiconductors for the automotive, microcontroller, secure identification, network processing, and RF power applications.

Earlier this year, Intel closed its deal with Altera, making it a dominant player of FGPA-based NFV solutions. Avago Technologies and Broadcom were also two companies that have come together fairly recently.




Edited by Alicia Young

Executive Editor, TMC

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