Integrated Device Technology Inc. today triggered a corporate restructuring aimed at further sharpening its communications market focus, by reconfiguring its internal product groups to create the Internetworking Products Division.
The IPD unit "combines and redirects" IDT's microprocessor division, switching products group, and networking products division with an aim toward developing application-specific solutions for voice, data, and wireless networks.
"With nearly 75% of our revenue generated by products sold to communications customers, we have identified those competencies we can further capitalize upon and gathered their strengths in the Internetworking Products Division," said Jerry Taylor, president and chief executive of the Santa Clara, Calif., company.
At the heart of the realignment, IDT's new division is assigning existing divisions with a tradition of specific product development with the new task of tackling customer- and market-driven applications. The processor division in particular will shift its focus from developing high-performance, stand-alone chips to ones able to deliver more functions for networking applications, the company said.
With more than 50 design engineers, the new division's initial goals include accelerating development of communications ASSPs, including ATM and TSI/TDM switches, high-speed PHYs, and communications processors. Target applications include DSLAMs, voice-over-Internet Protocol gateways, ATM switches, wireless base stations, home networking, and SOHO routers.
"IDT is focusing its resources where we can make the greatest impact," said Dave Cote, vice president of Communications ASSPs. "We've seen great success in the acceptance of our networking and switching products in emerging markets. This experience and expertise, coupled with IDT's history of innovation in microprocessor technology, makes IPD a strong foundation for growing IDT as fast as the high-growth communications markets it serves."
Meanwhile, Clear Logic Inc. today said that IDT has agreed to reduce its 81% equity stake in the company in exchange for $22 million in redeemable preferred stock. Upon completion of the transaction, IDT will hold 56% of Clear Logic's common share equivalents and a total of $34 million of the company's debt.
"We are grateful to IDT for believing in our concept and providing initial funding," said Al Huggins, Clear Logic's chief executive. "We have received good preliminary interest from both potential funding partners and strategic partners. We are in the early phases of examining the receptivity of public capital markets."
Clear Logic, a San Jose-based company that sells a line of low-cost drop-in replacement ICs for Altera Corp.'s programmable logic devices, was founded in May 1996 as a venture subsidiary of IDT.
"IDT has had other venture investments that have achieved excellent financial success, and this transaction moves us toward a similar position as a passive, minority investor," said Alan Krock, IDT's chief financial officer. "The present capital restructuring of Clear Logic gives the company the ability to tap into larger sources of capital from a broader investor base. A broader universe of funding sources will enable Clear Logic to accelerate new product development and reach the IPO stage much more quickly."