Peeling away yet another layer of its business, Cirrus Logic said it has entered into a memorandum of understanding to spin out its communications products group.
About 35 employees from that unit will form Basis Communications, which will acquire a portfolio of Cirrus' communications products such serial I/O and parallel I/O controllers and other products presently under development, a spokesman said. The portfolio accounted for 3% of the company's consolidated revenue.
The spokesman said that Cirrus will continue to sell some communications products such ethernet PHYs and controllers and T1/E1 line interface units and framers, which he characterized as "vibrant product lines" for the company.
The Fremont, Calif. chip maker will hold a minority equity position. No other financial details about the deal were released.
"This action represents yet another milestone in our program to return the company to a predictable and sustainable business model through a sharpened focus on proprietary precision linear and advanced mixed-signal chip solutions," said David D. French, president and chief operating officer in a statement.
The latest transaction is part of major restructuring that company has been undergoing for quite some time.
Most recently, the company shed its stake in the Cirent Semiconductor fab, an Orlando, Fla.-based joint venture with Lucent Technologies. It also has decreased its 48% stake in the MiCRUS fab it shares with IBM Microelectronics.
Additionally, Cirrus has spun off its PC graphics business and has put its PC modem division up for sale, the spokesperson said. The company expects to close a deal for the modem unit by the end of the current quarter, he said.
By phasing out these businesses, Cirrus hopes to focus its strategies on the more profitable precision linear and mixed signal products used for audio, mass storage and high-precision data conversion applications.
These core competencies account for more than $500 million in annual revenue, the spokesperson said. For fiscal 1998 ended March 28, the company posted net income of $36.5 million on sales of $954.3 million.
In the most recent second quarter, Cirrus took $123 million restructuring charge, and reported a net loss of $121 million on sales of $169.7 million.