PLX Technology, a Silicon Valley provider of connectivity solutions for data center and consumer products, has entered into an agreement to buy 10GbE semiconductor maker Teranetics  for a total of $53.8m. With the move, the traditionally PCI Express-focused buyer will enter the 10GbE-over-copper market, where it expects accelerated growth as data centers upgrade from 1GbE networks.

According to PLX, Teranetics, a seven-year-old company based in San Jose, California, was first in the industry to deliver a fully integrated single-chip implementation of single-port and dual-port 10GBase-T PHY silicon, pushing 10GbE over copper. The technology enables 10Gb rates over CAT6 and CAT6a cabling, enabling data centers and enterprise networks to increase scalability and improve throughput while lowering cost of ownership for 10Gb links.

PLX President and CEO Ralph Schmitt said PLX welcomed the new team on board to share values of leadership, excellence, integrity and winning. "PLX is fully committed to this market and will continue to invest in future PHYs and other IP to bring high-performance system-level products to market," he said in a statement.

Teranetics outsources manufacturing of its products.

PLX will acquire Teranetics for 7.4m PLX shares, valued about $27.6m, $1.3m in cash and two promissory notes totaling about $6.9m. The first $5.4m note will be due one year after the deal closes and the second $1.5m one will be due three years from closing. PLX will also assume about $18m of Teranetics obligations.

PLX expects significant growth in the 10GbE market as 1GbE networks are upgraded, with servers expected to start shipping with 10GBase-T on motherboards next year. The company expects the acquisition to enable it to "tap further" into the $2bn Ethernet semiconductor market.

According to Linley Group, more than four million 10GbE ports are expected to ship in 2012 and more than 22 million in 2014. Today, more than 200m 1GbE data center switch ports are shipped annually (PLX-cited figures).

PCI Express has been a focus in PLX