We finally know where the Intel silicon photonics pluggable optics business is going. Today, Jabil disclosed that it purchased the business from Intel. That actually makes a solid amount of sense given the optical module production costs, and that the modules were mostly sold to hyper-scale clients.
Jabil Buys the Intel Pluggable Silicon Photonics Business
Last week, we covered that Intel said it is divesting its pluggable optical module business. We knew that that business likely had hundreds of millions of dollars in revenue, possibly more, so it seemed too big of a business to shutter.
From the Jabil press release:
“This deal better positions Jabil to cater to the needs of our valued customers in the data center industry, including hyperscale, next-wave clouds, and AI cloud data centers. These complex environments present unique challenges, and we are committed to tackling them head-on and delivering innovative solutions to support the evolving demands of the data center ecosystem,” stated Matt Crowley, Senior Vice President of Cloud and Enterprise Infrastructure at Jabil. “This deal enables Jabil to expand its presence in the data center value chain.” (Source: Jabil)
Between the Intel earnings release and this Jabil release, we have a clear picture of what is happening to the business.
The silicon photonics pluggable module business going to Jabil follows Intel exiting the server business and selling it to MiTAC earlier this year and ASUS taking the NUC business. Intel is significantly streamlining its product portfolio this year. A big question on why here comes down to what has changed. Perhaps the bigger implication is if the industry is moving to pluggable optical lamps on switches or if Intel assumes it is going to be doing silicon photonics integrated onto packages via chiplets. The other option might simply be that Intel needed to raise cash or discontinue the business to spend capital elsewhere.