Analog Devices announced Tuesday it has agreed to sell its read-channel ASIC technology to Adaptec.
Under the agreement, Adaptec, in Milpitas, Calif., will make an initial cash payment of $34 million, followed by subsequent payments of $6 million for R&D services during a transition period and up to $20 million in royalties, based on the sale of products using the acquired technology.
"This purchase provides a strong foundation for our future. Mass information storage is becoming an increasingly important element in today's information technology strategies," said Grant Saviers, chairman, CEO, and president of Adaptec. "Acquisition of ADI's top-quality, mixed-signal, read-channel technology will sustain Adaptec's leadership position as the industry moves to integrate more ASICs yielding smaller, higher performance storage devices."
For Analog Devices, the sale fits into the company's strategic decision to focus on analog ICs and digital signal processing products, said Jerald G. Fishman, the company's president and CEO. "As a result of this agreement, ADI is rewarded for its technical innovation in this area and Adaptec is in a better position to sustain its technical leadership in the mass storage arena," Fishman added.