Wednesday, August 18, 2010

AppliedMicro Agrees to Acquire TPACK

SUNNYVALE, Calif. – Aug. 18, 2010 – Applied Micro Circuits Corporation, or AppliedMicro (Nasdaq: AMCC) today announced that it has entered into a definitive stock purchase agreement to acquire TPACK A/S of Copenhagen, Denmark. Applied Micro Circuits will pay $32 million in cash plus up to $5 million in cash earn-outs that are depending primarily upon TPACK revenues and product development milestones scheduled over the next eighteen months. The transaction is expected to be profit neutral, excluding transaction costs, for our fiscal year ending March 31, 2011 and to be accretive thereafter.

The acquisition of TPACK, an industry-leading provider of silicon intellectual property (IP) for Mapping and Switching functions to leading telecom and networking equipment suppliers, will enable AppliedMicro to expand its presence and customer relationships in the rapidly growing Optical Transport Network (OTN) and Carrier Ethernet markets.

TPACK’s SOFTSILICON™ products support the fastest deployment of new carrier-class packet and optical network standards with the greatest flexibility for Tier 1 equipment vendors. Implemented in Altera FPGA devices, TPACK’s solutions address the unique requirements of individual equipment vendors and accelerate time-to-market for 10, 40 and 100 Gbps OTN switching and routing solutions. As OTN standards evolve and mature, AppliedMicro will use the early engagement work with customers and develop standard reference designs that maintain software compatibility while offering lower cost and lower power.

“While the OTN silicon market is growing rapidly, OTN standards and implementations are still evolving-- thereby offering system OEMs a broad field to uniquely differentiate their products with custom features and legacy support at various levels. This has led a large proliferation of FPGA technology within our customers’ platforms. These FPGA solutions sit beside our products and together provide a scalable, system solution for our customers,” said George Jones, Head of Marketing and Business Development for Transport products at AppliedMicro. “TPACK’s IP implemented in Altera FPGAs will provide us with the flexibility to meet our customers’ special requirements and get to market quickly with leading-edge performance. We believe TPACK’s team of talented engineers will make AppliedMicro more nimble and responsive to a greater range of market needs as system requirements continue to evolve and grow.”

Founded in 2001, TPACK has 37 employees, including 28 design engineers, and brings a track record of innovative product development and steady financial growth as a privately-held company. Following the acquisition closing, the company will continue to operate from its Copenhagen office as a wholly-owned subsidiary of AppliedMicro.

“AppliedMicro shares our vision on how to meet the emerging OTN standards, first with soft-FPGA solutions, and then extend the lessons learned from early customer engagements to improve integration of our Framer-Mapper and Carrier Packet Processor product lines,” said Colin L.M. Macnab, CEO of TPACK. “This acquisition delivers a partnership providing customers with an industry-first, allowing OEMs to transition from first-to-market solutions, through HardCopy® to volume production while maintaining a unified hardware and software architecture.”

“TPACK’s innovative SOFTSILICON™ solution extends the benefits of low NRE and feature-rich flexibility of FPGA solutions into rapidly emerging OTN market space,” said Arun Iyengar, senior director of the communications and broadcast business units at Altera Corporation. “With this acquisition, we look forward to having the same collaborative effort with AppliedMicro that we enjoyed with TPACK. The packet optical transport space is a focused market for us and one that we continue to build upon through our close work with AppliedMicro and the TPACK design team.”

The stock purchase transaction is subject to customary closing conditions, and is expected to close within the next thirty (30) days.

About TPACK
TPACK delivers cutting edge Silicon ICs providing core data transport and switching functions to leading Telecom and Networking equipment suppliers. TPACK’s SOFTSILICON products support the fastest deployment of new Carrier Class Packet and Optical Network standards, providing the most flexible, cost and power effective implementations throughout the life of the equipment. TPACK's customer base includes Tier 1 equipment providers who account for more than 50% of the optical transport equipment market.

AppliedMicro Overview
AppliedMicro is a global leader in energy conscious communications and computing solutions for telco, enterprise, data center, consumer and SMB applications. With a 30-year heritage as an innovator in high-speed connectivity and high performance embedded processing, AMCC, now AppliedMicro, employs patented transport and embedded processor SoCs to provide high performance energy efficient products. AppliedMicro's corporate headquarters are located in Sunnyvale, California. Sales and engineering offices are located throughout the world. For further information regarding AppliedMicro, visit the company’s Web site at http://www.apm.com.

Tuesday, August 17, 2010

MIT Spin-out Lyric Semiconductor Launches

SANTA CLARA, Calif., and AUSTIN, Texas – August 17, 2010 – Lyric Semiconductor, Inc. a DARPA- and venture-funded MIT spin-out, today emerged from stealth mode to launch a new technology called probability processing, which is poised to deliver a fundamental change in processing performance and power consumption. With over a decade of development at MIT and at Lyric Semiconductor, Lyric’s probability processing technology calculates in a completely new way, enabling orders-of-magnitude improvement in processor efficiency. Lyric Error Correction (LEC™) for flash memory, the first commercial application of probability processing, offers a 30X reduction in die size and a 12X improvement in power consumption all at higher throughput compared to today’s digital solutions. Lyric Semiconductor has developed an alternative to digital computing. The company is redesigning processing circuits from the ground up to natively process probabilities – from the gate circuits to the processor architecture to the programming language. As a result, many applications that today require a thousand conventional processors will soon run in just one Lyric processor, providing 1,000X efficiencies in cost, power, and size.


For over 60 years, computers have been based on digital computing principles. Data is represented as bits (1s and 0s). Boolean logic gates perform operations on these bits. Lyric has invented a new kind of logic gate circuit that uses transistors as dimmer switches instead of as on/off switches. These circuits can accept inputs and calculate outputs that are between 0 and 1, directly representing probabilities - levels of certainty.


A digital processor steps through these operations serially in order to perform a function. In order to improve efficiency even further, Lyric’s processors are designed to perform many probability computations in parallel.


Lyric’s approach can accelerate search, fraud detection, spam filtering, financial modeling, genome sequence analysis, and many other important present and future applications that involve simultaneously considering many possible alternatives and deciding on the best fit – the best guess for the answer. In theory, digital processors can perform these calculations, but in practice, they do so very inefficiently. As a result, a huge amount of processing overhead is required, costing an enormous amount of space, power and money.


“After a decade of development, we have no shortage of opportunities for our probability processing technology, but we are currently focused on a modest list of both short and long-term applications that will see enormous gains in performance,” says Lyric Semiconductor CEO and co-founder Ben Vigoda. “We are starting with Lyric Error Correction but ultimately plan to develop a more general purpose probability processor that will truly change the landscape for many applications.”


Lyric Error Correction (LEC™) for Flash Memory

Flash error rates have become increasingly problematic with each new generation of the technology. Today, one in every thousand bits stored in a flash memory comes out wrong when the memory is read. In the next generation, the number of errors will approach one bit wrong in every hundred. Flash companies spend billions of dollars on new foundry processes in order to increase overall flash density, but then suffer from increasing error rates. As a result, “advanced” error correctors have had to become significantly larger, more complex and more expensive. LEC is Lyric’s first commercial probability processing offering– an advanced error corrector for flash memories that is 30X smaller and has 12X lower power consumption, all at a higher bandwidth than the digital implementations currently available.


The GP5™

Beyond today’s LEC technology, Lyric is developing the GP5™ – a general-purpose programmable probability processing platform. The GP5 will be ideally suited to calculate probabilities for all types of applications – from web searches to genome sequencing – and could enable performance gains of 1,000X over today’s digital x86-based systems such as the processors from Intel and AMD. The GP5 will run code written in Lyric’s own probability programming language called PSBL™ (Probability Synthesis to Bayesian Logic), an expressive computer programming language for working with probability based computations. Lyric will leverage its probability processor and programming technologies to deliver disruptive total systems to its customers.


Availability

Lyric’s LEC technology is currently available for license, accompanied by support services enabling product integration within 12 months. Beyond LEC, the first GP5 will begin sampling in 2013.


About Lyric Semiconductor

Lyric Semiconductor is a fabless semiconductor company founded in 2006 by MIT Ph.D. Ben Vigoda and semiconductor industry veteran David Reynolds, and is located in Cambridge, Mass. Lyric’s probability processing technology was first envisioned by Vigoda at MIT. Lyric’s lead investor and chairman of the board is Ray Stata, founder and 30-plus year CEO of Analog Devices and lead partner of Stata Venture Partners. Lyric currently employs 30 people and has received more than $20 million in government funding from DARPA and other agencies and venture investment from Stata Venture Partners. Lyric Semiconductor maintains a growing IP portfolio of 50 fundamental patent filings in the field of probability processing. More information on the company and its probability processing technology can be found at its new web site, also launched today, at www.lyricsemiconductor.com.

Sunday, August 15, 2010

Smooth-Stone Secures $48 Million to Complete Development of Semiconductors for Servers, Data Centers

Austin, TX, August 16, 2010 – Smooth-Stone today announced it is raising $48 million from a unique syndicate of investors comprising industry leading venture capital firms and semiconductor innovators. The capital will be applied directly to the final development and market delivery of high performance, low power chips that will change the server market and the makeup of data centers. Smooth-Stone funding partners include ARM, Advanced Technology Investment Company (ATIC), Battery Ventures, Flybridge Capital Partners, Highland Capital Partners and Texas Instruments Inc.

“This kind of investment, the amount, and the strength of this syndicate is a strong endorsement for the innovation we are bringing to market,” said Smooth-Stone CEO Barry Evans. “We look forward to taking advantage of the insights and know-how of these industry-leading investors.”

Power consumption matters more than ever. Smooth-Stone will bring the low-power virtues of mobile phone technology to servers and data centers. Its semiconductors and software will provide a solution for companies where energy consumption by servers has become a constraining and expensive issue by increasing the density of computer resources while significantly conserving energy, cooling and space in the data center. Smooth-Stone customers will have new, unseen options as they plan their future server deployments.

“Our goal is to completely remove power consumption as an issue for the data center. Imagine that change for companies with a large presence on the Internet,” added Evans. “They all deal with the reality that as the mass of information grows daily, so does their power consumption. Every day these companies are thinking about managing their data center sprawl. We want to make sure that space and power are not constraining their potential.”

“The necessity of finding more energy efficient server solutions for data centers has created an enormous and truly revolutionary opportunity for the industry,” said Battery Ventures General Partner, Ken Lawler. “As a firm, we recognized from the beginning that Smooth-Stone had the innovative technology, the customer value proposition and the engineering and management capability to disrupt the web server landscape. Working with management, we’ve put together a unique investment structure and syndicate of both strategic and traditional venture capital investors that gives the company what it needs to succeed in this highly competitive market. Smooth-Stone has a very bright future and we’re thrilled to be part of this investment.”

Semiconductor investment has traditionally required a unique skill set and discipline, the importance of which has only been amplified by the recessed economy. The Smooth-Stone investor syndicate offers a strong collection of previous successes in the semiconductor industry including companies such as Advanced Analogic, Cimaron, Ikanos, MaxLinear, PA Semi, Sigmatel and SiTera and will actively support the company in its mission to redefine the server market and data center performance.

“ARM invests in companies that are taking innovative approaches to solving industry challenges. Smooth-Stone’s approach of bringing low power technology into the server domain made them a perfect fit for our investment model,” said Bruce Beckloff, vice president of corporate business development, ARM. “There is a strong market need for a new class of data center platforms that offer a significant improvement in performance from both the energy and density perspectives, and ARM is excited to support Smooth-stone’s efforts to develop innovative chip solutions for this new class of platforms.”

With this investment, ARM continues its seat on the Smooth-Stone board of directors, along with Evans and an independent, Howard Bubb. The three VCs, Battery Ventures, Flybridge Capital Partners and Highland Capital Partners, and ATIC, also join the board.

The Smooth-Stone board now comprises:
Smooth-Stone, Barry Evans, CEO ARM, Tom Lantzsch, Executive Vice President, Corporate Development ATIC, Daniel Durn, Executive Director Battery Ventures, Ken Lawler, General Partner Flybridge Capital Partners, David Aronoff, General Partner Highland Capital Partners, Sean Dalton, General Partner Howard Bubb, semiconductor industry executive

About Smooth-Stone
Founded in January 2008, Smooth-Stone brings unseen performance density to the data center on a very attractive power foot print by leveraging ultra-low power processors as used on mobile phones, as a foundation for its revolutionary technology. Smooth-Stone will make it possible for data center managers to increase the density of their computer resources while significantly reduce need for power, space and cooling. At the same time, Smooth-Stone technology will contribute to the reduction of the CO2 footprint of the data center in a significant way. More about Smooth-Stone can be found at www.smooth-stone.com.

About ARM
ARM designs the technology that lies at the heart of advanced digital products, from wireless, networking and consumer entertainment solutions to imaging, automotive, security and storage devices. ARM’s comprehensive product offering includes 32-bit RISC microprocessors, graphics processors, video engines, enabling software, cell libraries, embedded memories, high-speed connectivity products, peripherals and development tools. Combined with comprehensive design services, training, support and maintenance, and the company’s broad Partner community, they provide a total system solution that offers a fast, reliable path to market for leading electronics companies. Find out more about ARM at: www.arm.com.

About ATIC
The Advanced Technology Investment Company (ATIC) was created in 2008. A technology investment company wholly owned by the Government of Abu Dhabi, ATIC is focused on making significant investments in the advanced technology sector, both locally and internationally. Its mandate is to generate returns that deliver long-term benefits to the Emirate of Abu Dhabi. ATIC seeks to leverage the unique advantages it enjoys as an investor from the Emirate of Abu Dhabi to identify and realize long-term investment opportunities in the highly competitive and capital-intensive advanced technology sector. These advantages include significant and reliable capital, a patient investment philosophy, and a subsequently long-term investment horizon. For more information visit www.advancedtechnologyic.com

About Battery Ventures
Since 1983, Battery has been investing in technology and innovation worldwide. The firm partners with entrepreneurs and management teams across technology sectors, geographies and stages of a company’s life, from start-up and expansion financing, to growth equity and buyouts. Battery has supported many breakthrough companies around the world, including: Advanced Analogic Technologies (NASDAQ: AATI), Lara Networks (acquired by Cypress Semiconductor) MaxLinear (NYSE: MXL), Sigmatel (NASDAQ: SGTL). Its current portfolio includes emerging and more established firms such as Amalfi Semiconductor, Angie’s List, Anobit, Bazaarvoice, Exact Target, GreenBytes, Groupon, Opscode, Optichron, ITA Software and Zenverge. From offices in Boston, Silicon Valley and Israel, Battery manages nearly $4B in committed capital, including its current fund of $750M. For more information, visit www.battery.com.

About Flybridge Capital Partners
Flybridge Capital Partners is an early-stage venture capital firm whose mission is to assist entrepreneurs in growing innovative, global companies. With $560 million under management, the firm is focused on investing in consumer, energy, healthcare and information technology markets and is led by a team with domain expertise and more than half a century of combined experience in venture capital. www.flybridge.com.

About Highland Capital Partners
Highland Capital Partners was founded with the mission of helping great people build great companies. For over twenty years, the firm has taken a sector-focused approach to investing in exceptional healthcare, internet & digital media and technology companies. With $3 billion of committed capital and offices in Boston, Silicon Valley, Shanghai and Geneva, Highland has invested in and worked to create such firms as Ask Jeeves, Avid Technology, CheckFree, Conor Medsystems, lululemon athletica, Lycos, MapQuest, Navic Networks, New York Times Digital, Ocular Networks, P.A. Semi, Quattro Wireless, Quigo, Staples.com, Starent Networks, Sybase, Telica and VistaPrint. For more information, visit Highland’s web site at www.hcp.com.

About Texas Instruments
Texas Instruments (NYSE: TXN) helps customers solve problems and develop new electronics that make the world smarter, healthier, safer, greener and more fun. A global semiconductor company, TI innovates through design, sales and manufacturing operations in more than 30 countries. For more information, go to www.ti.com.

Wednesday, August 11, 2010

Summary list of recent Semiconductor M&A deals

Here's a summary list of M&A deals reported on Private Semiconductor™ and Filing Watch™ web sites within the past 15 months. No doubt I have failed to capture some deals as our focus is on transactions with North American connections.

Market recovery, limited growth opportunities and consolidation pressures drive semiconductor M&A