Broadcom Takes 10-Gig Shortcut

Broadcom Corp. (Nasdaq: BRCM) bought a shortcut to 10-Gbit/s Ethernet silicon today when it acquired startup Siliquent Technologies Ltd. for cash and stock.

As part of the deal, Broadcom will assume all of Siliquents unvested employee stock options, which will entitle the holders to receive up to approximately 200,000 shares of Broadcom stock upon vesting. That could bring the total value of the deal from $76 million in cash and stock to $83.7 million, based on Broadcom’s stock price of $38.39 at Monday’s close.

Siliquent brings Broadcom something vital it's been missing: 10-Gbit/s Ethernet technology for its Converged Network Interface Cards (C-NICs). (See Broadcom Struts Storage Stuff and Broadcom Broadens Storage Play.) Siliquent has been sampling 10-Gbit/s Ethernet NICs to server OEMs for a year, but had no design wins (see Siliquent Segues (Sibilantly) to 10-Gig).

In contrast, Broadcom’s C-NICS combine TCP/IP offload, iSCSI, and RDMA capabilities on a single chip, but those chips have been chugging along at 1 Gbit/s and 2.5 Gbit/s while Siliquent and other startups beat Broadcom to market with 10-Gbit/s processors.

It's not that Broadcom's been ignoring 10-gig. “We’ve been in development in 10-gig Ethernet for some time,” says Greg Young, VP of Broadcom’s high-speed controller business. “This brings us great acceleration in development and delivery of 10-gig speeds.”