Austin enjoyed two pieces of encouraging news recently-three if you count the resignation of Chris Galvin as Motorola's CEO.

The first was the very successful IPO of audio chip vendor SigmaTel on Sept. 19. The following week, I got an e-mail from a proud father (himself an engineer) of a SigmaTel mixed-signal chip designer that started, "My son, daughter-in-law and two grandchildren all became millionaires last Friday . . . "

They deserve it: SigmaTel has been fighting for a decade in a tough market, with plenty of legal challenges along the way.

The second event was the acquisition of Cygnal Integrated Products by Silicon Laboratories, announced on Sept. 25.

Cygnal has a fast (as much as 100 Mips) 8051 processor core that it combines with a switching fabric, 10- and 12-bit D/A converters and other mixed-signal functions. Cygnal had sales of $5.2 million in 2002; Silicon Labs, which has hit the big time over the past five years with its RF, modem and other mixed-signal devices, will exceed $250 million in revenue this year.

If Cygnal boosts its sales from the second quarter of 2004 to the end of the first quarter of 2005 to $10 million, the acquisition is worth $60 million. If it hits $15 million in sales, the total is $75 million. With $20 million in sales, it is valued at $100 million, and if it hits the $24-million mark, the Cygnal employees and backers split $125 million.

The acquisition brings together some old friends with an interesting history.

Doug Holberg, the CTO at Cygnal, started out working with Mike Callahan at Mostek in Dallas. The two came to Austin and started Texas Micro Engineering, hiring Dave Welland, later one of the Silicon Labs founders. They and others started Crystal Semiconductor, and hired Eric Swanson from Bell Labs, who brought Nav Sooch and several others to work at Crystal.

In 1991, Crystal was purchased by Cirrus Logic. Sooch, Welland and Jeff Scott left Crystal in 1997 to start Silicon Labs; Holberg joined Derrell Coker and Don Alfano to start Cygnal in 1999.

Now that these mixed-signal cronies are back together, it will be interesting to see how Cygnal competes against the microcontroller heavyweight in during the rest of this decade.

David Lammers covers SoC process equipment. Contact him at dlammers@cmp.com.

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