Dive Brief:
- On Wednesday, Cisco announced plans to purchase Leaba Semiconductor for $320 million in cash.
- The Israeli chip fabrication company will become part of Cisco's hardware unit.
- With the news of its intent to purchase Leaba, this week Cisco has announced plans to spend $580 million on two acquisitions.
Dive Insight:
The purchase may come as a surprise to many, since the company has been investing more in cloud and security services lately. Yesterday, Cisco announced a $260 million purchase of cloud management company CliQr, which will allow companies to more easily adopt a hybrid cloud solution.
But, Leaba is a hardware company, which is more closely related to Cisco's traditional offerings, not its expanded capabilities. The semiconductor company operates "in stealth mode to provide innovative solutions for significant infrastructure challenges," according to the company’s website.
In the past, former Cisco chief executive officer John Chambers expressed interest in investing in application-specific integrated circuits (ASICs). ASICs are chips built for specific tasks. The purchase of Leaba could indicate that current Cisco CEO, Chuck Robbins, wants to move in the same direction.
