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Cisco Buys Stealthy Chip Maker

Chuck RobbinsChuck Robbins
Cisco CEO Chuck Robbins.Photograph by Paul Sakuma — Cisco Systems Inc./AP

On Tuesday, Cisco said it’s buying Leaba Semiconductor, a mysterious chip fabrication (fab) company based in Israel, for $320 million in cash. Ynet, an Israeli-news outlet, broke news of the deal earlier, putting the purchase price at $380 million.

It’s interesting that Cisco (CSCO), the networking hardware giant that’s breaking into cloud computing and other more software-heavy areas, is pouring more cash into foundational hardware.

Cisco expands Intercloud alliance

Cisco’s former chief executive officer (and current chairman) John Chambers has said that one of the company’s hedges against the commodification of networking hardware was its focus on specialty application-specific integrated circuits. ASICs are chips built for specific tasks as opposed to more general-purpose processors powering many servers and PCs. This could indicate that his successor, Chuck Robbins, is following the same tack.

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The Leaba group will report to Cisco senior vice president Ravi Cherukuri, head of Cisco’s Core Hardware Group.

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This news comes a day after Cisco announced its $260 million purchase of CliQr a cloud management company.