NEWPORT BEACH, Calif. -- Hot on the acquisition trail, Conexant Systems Inc. here today announced plans to buy privately held HotRail Inc., a San Jose-based supplier of high-speed switch fabric and backplane channel technology. Conexant said it will acquire HotRail for 7.8 million shares of stock, worth about $400 million.
Conexant said HotRail's technology will enable it to deliver complete solutions for next-generation Internet infrastructure equipment. These systems include multi-terabit routers, asynchronous transfer mode (ATM) and Internet protocol switches, gigabit Ethernet switches, and optical networking gear.
"With the increasing complexity of communications equipment for the Internet infrastructure, our customers are looking for comprehensive, robust and innovative solutions from their key suppliers," said Dwight W. Decker, chairman and CEO of Conexant. "Today's acquisition of HotRail will allow us to accelerate our strategy of delivering the complete silicon solutions that our customers require."
HotRail has raised about $34.5 Million in venture capital to pursue advanced technologies for terabit switching and scalable packet processing across backplane systems. The startup has developed a scalable parallel CMOS transciever, called HotRail Channel, for bandwidth of 16-gigabit-per-second, full-duplex interconnects between chips and boards. HotRail has also created a 3.125 gigabit-per-second serial transceiver for Fibre Channel, InfiniBand, and Gigabit Ethernet standards. This transceiver, called SkyRail Link, and the HotRail Channel are now being sampled to customers.
Once the acquisition is completed next week, HotRail will become part of Conexant's Network Access Division. Conexant said its product portfolio will then span a complete array of networking system components, from physical layer line interfaces to network processors to switch fabrics.
"In the past six months, we have acquired Maker Communications for its network processors and software, Microcosm for its optical transceivers and Applied Telecom for its telecommunications systems software," Decker said. "With the addition of HotRail's innovative switching and interconnect technology to our comprehensive portfolio of semiconductor products, we now offer the major components of a total networking system solution."