IRVINE, Calif. Confirming rumors that had circulated in investor communities for the past week, Broadcom Corp. said early Monday (Nov. 6) that it will acquire SiByte Inc. (Santa Clara, Calif.), a developer of high-performance MIPS cores.
Broadcom will issue 9.3 million shares of common stock for the transaction. At $222 per share, the cost of the acquisition will be $2.06 billion. Henry Nicholas, chief executive officer of Broadcom, said the MIPS cores of SiByte will complement two other recent Broadcom acquisitions, the 10-Gbit media-access controller chips of Allayer Technologies Inc., and the security processors of BlueSteel Networks Inc.
As developer of the SB-1, a 1-GHz MIPS core, SiByte is commonly compared to Quantum Effects Devices Inc., a MIPS controller developer acquired last spring by PMC-Sierra Inc. But Nicholas pointed out differences between the two companies. "The QED architecture is targeted at different applications in overall communications control," he said. "The SB-1 architecture from SiByte has is a datapath real-time packet processor. It could be used in control applications, but it is optimized for real-time network processor applications."
SiByte already has sampled test members of Mercurian, a family of low-power processors for network control, but Nicholas said the real excitement will begin when SiByte samples the SB-1250 dual-core MIPS processor in the first quarter of 2001. The SB-1250 will have a 128-Gbit/s internal proprietary bus called ZBBus, and will offer symmetric multiprocessing for packet processing, with full I/O coherence. It is a reprogrammable architecture that can handle packets or cells. The SiByte architecture was one of the few designs that could handle 2.5- and 10-Gbit packet throughput, while providing a path to achieve 40-Gbit/s speeds in the future, Nicholas said.
"This requires no external co-processors for packet classification or traffic management," Nicholas said.
Of SiByte's 120 employees, 113 are engineers, and 95 percent of them hold advanced degrees, Nicholas said. SiByte is headed by former Digital Equipment Corp. designer Dan Dobberpuhl, a key architect of the StrongARM processor. Of the many acquisitions Broadcom had made in recent months, Nicholas said SiByte had perhaps the greatest design talents.
Of the 9.3 million shares offered by Broadcom for SiByte, 5.6 million shares will be issued at the close of the acquisition, and 3.7 million additional shares will be reserved for SiByte shareholders and option holders upon the completion of performance goals. Broadcom also will reserve 1.8 million shares of stock for future issuance to customers after SiByte exercises certain performance-based warrants for customer purchase requirements. If all milestones are realized and all options exercised, the deal will be worth a total of $2.46 billion.