QED (Santa Clara, Calif.), a leading provider of MIPS processors for networking applications, targets its RM5200 and RM7000 families of 32- and 64-bit embedded microprocessors at fast-growing communications markets such as Internet access devices, routers, switches and optical transport systems. The company recently began sampling the 64-bit RM7000A, which runs at 450 MHz and consumes 4 W.

PMC-Sierra will issue 0.385 shares for each share of QED, for a total share value of approximately $2.3 billion based on PMC-Sierra's Tuesday (July 11) closing price. The transaction will be accounted for as a pooling of interests and is subject to the satisfaction of customary closing conditions, including approval by QED stockholders and the expiration of a regulatory waiting period.

Bob Bailey, chairman and chief executive officer of PMC-Sierra, said the MIPS architecture is "one of the most widely adopted architectures in the broadband infrastructure. QED's products are very complementary to PMC-Sierra's solutions for the access and core infrastructure applications which include our recent acquisitions of several DSP-based technology companies," he said. As their processing power increases, PMC-Sierra said MIPS processors may potentially find use in applications such as line cards for routers and switches, Bailey said.

The QED team of over 100 employees will join PMC-Sierra as a new business unit. Tom Riordan, president and chief executive officer of QED, will report to Bailey as vice president and general manager of the new business unit.