Cisco will pay $660 million in cash and assumed equity awards for the acquisition of privately-held Luxtera. The Carlsbad, California, semiconductor company uses silicon photonics to build integrated optics capabilities for hyperscalers, enterprise data centers, and service providers.

Cisco plans to incorporate Luxtera's technology across its intent-based networking portfolio, which spans data center and service provider markets.

David Goeckeler, executive vice president and general manager of Cisco’s networking and security business, said in a statement that global internet traffic is expanding exponentially and "optics is a fundamental technology” to enable the fastest networks.

Cisco specifically cited integration of Luxtera’s technology into its 100GbE and 400GbE portfolios. As system port capacity increases to 400GbE and beyond, optics plays an increasingly important role in addressing density and power requirements, according to the company.

In late October Cisco announced 400G switches that target hyperscale cloud providers, large enterprise data centers, and telecommunications providers moving to 5G. The company was actually a bit late to the 400G party. Its competitors Arista and Juniper had already announced 400GbE switches earlier in the year.

“While much of the recent focus has been on our software transition, it goes without saying that world-class hardware, coupled with our investment in silicon and optics, is at the heart of our intent-based networking strategy,” said Rob Salvagno, Cisco's VP of corporate business development, in a blog.

Luxtera’s silicon photonics technology integrates high performance optics directly with silicon electronics, bringing what it calls “fiber to the chip” connectivity. This speeds the transfer of data between servers.

At the Open Networking Foundation’s Connect event in Santa Clara, California, earlier this month, Google Fellow Amin Vahdat emphasized the importance of data transfer speeds. He said that every year Google increases the capacity of its network. And the company is concerned about the waning of Moore’s law. One possibility for increasing the speed of data between servers is cluster computing.

Asked about silicon photonics, Vahdat said, “We’re excited about silicon photonics. It’s still on the cusp of being critical.”

Cisco’s acquisition of Luxtera is expected to close before May of 2019. Luxtera employs from 50-100 people, according to Crunchbase, and it’s raised about $130 million during its 17 years of existence. Luxtera employees will join Cisco's optics business under Goeckeler.