Broadcom to acquire optical network chipsets maker Teknovus for $123 million

Broadcom Corporation, the maker of semiconductors for wired and wireless communications, has agreed today to acquire Teknovus, a provider of Ethernet Passive Optical Network (EPON) chipsets and software, for $123 million in cash to gain on EPON technology.

Petaluma California-based start-up company Teknovus, founded in 2002 with initial funding from semiconductor company NEC, is a developer and supplier of access chips and embedded software for the FTTx market, supporting EPON chipsets and software at 1G, 2.5G and 10G speeds.

Teknovus products are deployed by more than 35 service providers around the world, enabling the delivery of advanced triple-play services, including IPTV, via optical fibre networks and has sales, design and support centres in Tokyo, Seoul, Beijing, Shanghai, Hong Kong, San Jose and Boston.

According to the Dell'Oro Group, the Asia Pacific PON market is expected to grow from 22.8 million to 94.5 million subscribers by 2014, and according to Infonetics Research estimates, the worldwide market for PON systems will hit $4.5 billion in 2013.

Broadcom does not possess EPON technology for its business in the client broadband boxes and with the acquisition of Teknovus would give it proven EPON technology which has customers in China, Korea and Japan.

Teknovus, which as estimated revenues of around $40 million for 2009, has raised an approximately $70 million in funding to date.