The restructuring of Cirrus Logic continued in Fremont, Calif., Thursday as the chip maker announced plans to spin out a group of about 35 employees from its communications business unit to form Basis Communications.
Under terms of the agreement, Basis will acquire a portfolio of Cirrus Logic's networking products, which Basis will continue to manufacture and support. Cirrus will still work with Basis to assure full customer support through the transition, and retain an equity position in the new
"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. He added the product portfolio is being accounted for less than 3 percent of Cirrus Logic's consolidated revenue in 1998.
Cirrus Logic has been restructuring since last year, and has now
divested itself of two of its four former product divisions, the other being the graphics-chip business, which it spun off just two weeks ago. Cirrus has also pulled out of manufacturing altogether to return to its roots as a fabless chip company.
In addition, the company is moving to exit the analog modem-chip
market. A spokesman confirmed Thursday that Cirrus's modem unit is on the block, and that the company is in discussions to sell off its modem-chip business.
As Cirrus tries to focus on its most profitable markets, the bottom has fallen out of the modem-chip segment. Will Strauss, president of research company Forward Concepts, said unit shipments for modems will be up only about 7 percent this year, while prices have fallen nearly 20 percent, and he expects to see other companies depart the modem segment.
"This market is pretty grim," he added.