IRVINE, Calif.-- Still hot on the acquisition trail, Broadcom Corp. here today announced it will buy VisionTech Ltd., an Israeli supplier of digital video/audio compression and depression chips, for $777 million in stock. VisionTech's encoder chips are used in MPEG-2 applications for personal video recording, interactive videoconferencing, and Internet Protocol systems.
"PVR personal video recording is one of the most compelling consumer applications which will radically change the way people watch TV, allowing simultaneous recording and playback of live broadcast -- without a VCR or videotape," said Henry T. Nicholas III, president and CEO of Broadcom. "VisionTech's capability to compress live video in real time will be used across all of Broadcom's product lines for applications ranging from distributed video over home networking to IP video streaming over the Internet, also changing the way people use their computers, digital video cameras and other consumer electronics to communicate over broadband."
Privately-held VisionTech is a four-year-old fabless chip supplier headquartered in Herzliya, Israel. It's latest MPEG-2 video/audio encoder chip--Kfir-2--has been adopted by set-top box manufacturers, including Motorola Broadband Communications Sector (formerly General Instrument), Scientific-Atlanta, Pace, Microsoft WebTV, as well as PVR pioneer Replay TV.
"By 2005, PVR functionality will become an integral component of virtually every set-top box," predicted Amir Morad, president and CEO of VisionTech. He added that "integrating our technology with Broadcom's key strengths in video/audio decompression and broadband communication technologies, we will be uniquely positioned to address the growing set-top box and home networking markets."
According to market research by Cahners In-Stat, shipments of PVR systems will surge in the next few years. Between 2001 and 2003, unit shipments of PVR-enabled set-top boxes are expected to increase 275% each year, reaching 8 million systems by 2003, said In-Stat.
Broadcom said it will issue about 7.96 million shares of stock in exchange for VisionTech assets. Once the acquisition is completed, VisionTech will form the core of Broadcom Israel, a new subsidiary that will be managed by Morad. Broadcom said its new Israeli subsidiary will continue to focus on developing silicon solutions that enable MPEG compression of voice, video and data as well as evaluate new synergistic technologies from startup companies operating in the region.