LONDON Mosaid Technologies Inc. is cutting its workforce of nearly 120 by half and acquiring patents outside of its main memory chip business. The strategic shift is a response to a dispute last year with one of its largest investors, Loeb Partners Corporation, who demanded the sale of the company or divestiture of its non-core intellectual property (IP) business, the Systems Division.
The Canadian group announced Thursday (Feb. 22) the signing of a definitive agreement with Teradyne Inc who is acquiring enabling the test technology operation for $20 million.
The wind-down of the systems division and the IP group, as well as corporate groups will result in a staff reduction of 57 employees, the company said.
The semiconductor IP division was researching and developing cutting-edge power-management technology. Mosaid president and CEO George Cwynar said the Mobilized power-management technology has not been commercially successful because the marketplace isn't ready for it.
The shutdown will require a restructuring charge of $6 million to $6.5 million, the company said.
"We think that Mosaid's patents on the low-power circuit techniques in Mobilized may yield a future patent-licensing opportunity and we will explore this option going forward," added Cwynar.
As part of the strategic shift, Mosaid has bought for about $25 million a portfolio of patents related to WiFi and WiMax broadband wireless communications technology from Agere Systems.
Mosaid said it believes that the licensing revenue from the 23 issued and pending patents has the potential to surpass the revenues that the company has earned to date from its memory patents.
Under the agreement, Mosaid will pay Agere $5 million in its fiscal 2008 fourth quarter, and eight subsequent annual payments of $5 million - equivalent to $70 million over 10 years in a royalties revenue sharing arrangement with Agere.