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Avago's Unique Collaboration with Corning

Zacks Equity Research

Avago Technologies Limited (AVGO) recently collaborated with Corning Inc. (GLW) to develop new optical cabling connectivity solutions to provide its clients with greater flexibility in solving the prevailing challenges of the data center environment. In addition to an expansion in product portfolio, the strategic move is also expected to augment the individual revenues of the respective companies and strengthen their position in the market.

While Avago has developed various pluggable transceivers and optical engines for the Ethernet, Storage, and high performance computing applications, Corning has indigenously developed a new high-bandwidth optical solution for wider applications. With this collaboration, the companies expect to provide new optical connectivity solutions to address the ever increasing demands for high-bandwidth services, driven by applications such as HD (high definition) video to end devices, mobile data, and cloud computing and hosted applications.  

By increasing the bandwidth from 10G to 40G to 100G and beyond, the network becomes more programmable, thereby unlocking new potential architectural capabilities. Through this collaboration, Avago anticipates offering optical product solutions that are both economical and technologically advanced for an effective and fast data transfer system.    

With an expertise in compound semiconductor design and processing, Avago is a premier designer, developer and global supplier of a broad range of analog, mixed signal and optoelectronics components and subsystems. The company boasts over 4,200 patents serving three primary target markets: wireless communications, wired infrastructure, and industrial and other.

On the other hand, Corning is a leading manufacturer of specialty glass and ceramics. With over 160 years of experience, Corning offers keystone components that enable high-technology systems for consumer electronics, mobile emission control, telecommunications and life sciences. Its product portfolio includes glass substrates for LCD televisions, computer monitors and laptops; ceramic substrates and filters for mobile emission control systems; optical fiber, cable, hardware & equipment for telecommunications networks; and optical biosensors for drug discovery.

Avago faces stiff competition from other players in the market such as Rambus Inc. (RMBS) and PLX Technology Inc. (PLXT), each carrying Zacks Rank #1 (Strong Buy). However, Avago presently has a Zacks Rank #3 (hold).

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