Major chip vendor PMC-Sierra has agreed to acquire GEPON (and recently GPON) startup chipmaker Passave. The acquisition cost is report is reported  to be $300 Million in stock. Most of Passave’s business is currently with Mitsubishi/NTT in Japan with annual revenues reported to be ~$40 Million.

At the end of 2005, Passave shelved plans for an IPO due to a lawsuit filed by UT Starcom. This lawsuit has not yet been resolved and the effect of the lawsuit on the acquisition is unknown.

I assume this leaves the other startup xPON chip vendors (Teknovus and Broadlight) in an improved position due to the generous price paid for Passave. For additional commentary, please see here.