ALLENTOWN, Pa. In a move to beef up its chip offering for hard-disk drives, Lucent Technologies Inc. today announced plans to acquire VTC Inc.'s product portfolio and its design, marketing and sales operations for $100 million in cash.
VTC (Bloomington, Minn.) could receive up to an additional $50 million over the next two years if certain performance-based manufacturing goals are met, said Lucent's Microelectronics Group. Lucent expects the acquisition will put it in a position to provide a complete line of semiconductors for the data-storage market.
"Disk drive capacity is doubling every 12 months to store the vast amounts of text, graphics, audio and images that zip across the Internet," said Aaron Fisher, vice president of the Storage and Analog Products operation at Lucent Microelectronics in Allentown, Pa. "We can now better support our customers' needs to boost storage capacity and operating performance while meeting intense price pressures."
Lucent Microelectronics said it expects to be able to provide hard-disk drive makers with integrated solutions that optimize how components work together for higher levels of performance at lower costs. Lucent currently claims to be the leading supplier of read-channel ICs, which convert analog signals read off the disk drive's magnetic platters into digital bits. Lucent also supplies other digital and mixed-signal devices for the market. It is also pursuing system-on-chip designs for disk drives.
The acquisition of VTC's products will give Lucent a number of key analog ICs for drives, including preamplifier circuits that boost the strength of signals read off the platters for processing by the read-channel ICs.
The acquisition will give Lucent about 230 engineers, marketing personnel and sales managers "who have built their expertise in the analog and mass-storage business through their work with the top disk drive makers in the world," said Larry Jodsaas, chief executive officer of VTC.
Lucent said it expects the purchase to be completed by the end of March. The transaction will result in a one-time charge against earnings to cover a write-off of in-process R&D.
VTC's staff will become part of Lucent Microelectronics' Analog Products division, which is led by general manager Mark Granahan. VTC will continue its operations in Bloomington, Minn., Longmont, Colo. and Irvine, Calif., near facilities operated by leading disk drive manufacturers, said Lucent.