Monday, January 31, 2011

Cavium Networks to acquire Celestial Semiconductor

MOUNTAIN VIEW, CA--(Marketwire - January 31, 2011) - Cavium Networks (NASDAQ: CAVM), a leading provider of semiconductor products that enable intelligent processing for networking, communications and the digital home, announced today that it is has signed a definitive agreement to acquire China-based privately held Celestial Semiconductor, a fabless semiconductor company headquartered in Beijing, China with centers in Shenzhen and Shanghai. Celestial is a fast growing provider of ARM-based system-on-a-chip (SoC) processor solutions for a range of digital media applications.

The net purchase price of the acquisition will be approximately $55 million, to be paid in a combination of cash and stock. In addition, there is an earnout provision whereby the purchase price can increase by up to $10 million contingent on achieving certain revenue milestones during the following 12 months. The acquisition is expected to close by the end of the first quarter of 2011. Cavium Networks expects this acquisition will be non-GAAP earnings neutral during the first half of 2011 and modestly accretive by the second half of 2011.

Video traffic has been growing exponentially and is forecasted to be over 91% of all consumer traffic on the internet by 2014 according to Cisco's Visual Networking Index study. The main drivers for this growth are the delivery of TV, VoD, Internet video, P2P traffic and video conferencing. Furthermore video is being delivered over cable, satellite, fiber and mobile networks in many different formats including MPEG 2, H.264/AVC, AVS, Adobe Flash, Google WebM, Apple Quicktime, Microsoft WMV9 and a growing number of 3D formats.

Receiving and processing video from all of these various sources and in these many different formats increases the processing demands and the complexity of home consumer devices. These devices, such as rich media centers, home media gateways, set top boxes (STB), Internet TV (IPTV), Interactive TV video receivers and hybrid media-player devices that combine cable, satellite and Internet video into one system, represent a multi-billion dollar SoC processor total available market (TAM).

Celestial provides a family of ARM-based high-performance SoCs with HD quality video processing, multi-source video input and multi-format video playback. These SoCs combine transport processing, image processing, multi-standard media playback in 480/720/1080p, noise reduction, de-interlacing, audio processing, video encoding, advanced video post processing and picture enhancement, 2D/3D graphics, advanced security and content protection. A full range of input and output options including S/PDIF, DVI, HDMI, composite and component analog video, Ethernet, digital input, SATA, USB, and audio are also provided as part of a low cost BOM design. This is combined with a feature rich software solution complete with graphical user interface and support for major conditional access standards that are required by content providers and Telcos.

Celestial products have been designed into a range of devices such as set top boxes (STB), IPTV, Interactive TVs, Net multimedia players, and portable media players being deployed by cable and telecom media service providers, Interactive cable operators, multiple system operators (MSO) in China and other emerging geographies.

"Our highly integrated SoC processors enable feature rich, low cost and low power solutions that are being adopted by major telcos and service providers in China and other geographies. We are excited about leveraging Cavium Networks' world-class engineering, operations, sales and support resources to accelerate our reach to a broader set of worldwide customers," said Daniel Fu, CEO of Celestial Semiconductor. "Our complementary market focus and product technology synergies will reduce our development time and help our clients speed their time to market."

"Celestial Semiconductor's innovative SoC products complement Cavium Networks existing ECONA and PureVu product lines and will enable us to deliver feature rich combo products for a range of high volume applications in the Connected Home," said Syed Ali, President and CEO at Cavium Networks. "This acquisition further expands Cavium's TAM in the high growth digital media market. We see highly integrated, low cost and low power SoC solutions enabling a range of cable, internet and over-the-top content applications. Combing our technologies will enable Cavium to deliver compelling and differentiated end to end solutions for the entire digital video cycle."

About Cavium Networks
Cavium Networks is a leading provider of highly integrated semiconductor products that enable intelligent processing for networking, communications and the digital home. Cavium Networks offers a broad portfolio of integrated, software compatible processors ranging in performance from 10 Mbps to 40 Gbps that enable secure, intelligent functionality in enterprise, data-center, broadband/consumer and access & service provider equipment. Cavium Networks processors are supported by ecosystem partners that provide operating systems, tool support, reference designs and other services. Cavium Networks principal offices are in Mountain View, CA with design team locations in California, Massachusetts, India and Taiwan. For more information, please visit:

Thursday, January 27, 2011

ON Semi buys Cypress Image Sensor business for $31.4M

PHOENIX & SAN JOSE, Calif.--(BUSINESS WIRE)--ON Semiconductor (Nasdaq: ONNN), a premier supplier of high performance silicon solutions for energy efficient electronics, and Cypress Semiconductor Corp. (Nasdaq: CY) today announced that a definitive agreement has been signed for ON Semiconductor to acquire the CMOS Image Sensor Business Unit (ISBU) from Cypress in an all cash transaction for approximately $31.4 million. The transaction is expected to close by the end of the first quarter of 2011, subject to customary closing conditions.

Cypress’s broad portfolio of high-performance custom and standard CMOS image sensors are used in multi-megapixel digital photography and cinematography, machine vision, linear and two dimensional (2D) bar code imaging, medical x-ray imaging, biometrics and aerospace applications. The company’s products include the VITA, LUPA, STAR and IBIS families, which are well-known throughout the industry.

The ISBU will become an integrated part of ON Semiconductor’s Digital, Military/Aerospace and Image Sensor (DMI) division.

“The acquisition of the Image Sensor Business Unit from Cypress will solidify our position as a leading supplier of CMOS Image Sensor products,” said Bob Klosterboer, senior vice president and general manager of ON Semiconductor’s Digital and Mixed Signal Group (DMSG). “In addition, the acquisition will strengthen the company’s talent base and add an experienced design and applications engineering team for the image sensor market segment. The 2D high-speed CMOS image sensors from the ISBU will significantly strengthen and complement ON Semiconductor’s image sensor products for the industrial, medical, computing and military/aerospace markets.”

“The sale of our image sensor business will enable Cypress to continue to focus on programmable products including our flagship PSoC® programmable system-on-chip solution and our TrueTouch™ touch-sensing controllers,” said T.J. Rodgers, Cypress president and CEO. “Our image sensor team has done a remarkable job in recent years advancing its core technologies and broadening its target markets. We believe that ON Semiconductor represents the right home for the business, and that the sale, upon its completion, represents the best possible outcome for our existing customers.”

ON Semiconductor’s current products target one dimensional image sensing with particular focus on contact image sensing and ambient/proximity sensors. Once the acquisition is closed, the company will have a complete image sensing product offering between 1D and 2D sensors and across multiple end-markets.

Pursuant to the agreement, ON Semiconductor is expected to acquire approximately 100 patents and patent applications related exclusively to the business and receive appropriate intellectual property licenses from Cypress Semiconductor in order to continue to conduct and grow the business. As part of the transaction, approximately 80 Cypress Semiconductor ISBU employees will join the ON Semiconductor organization.

Upon the closing, ON Semiconductor may record one-time charges related to the transaction. The amounts of such charges, if any, have not yet been determined.

Wednesday, January 26, 2011

Silicon Labs acquires SpectraLinear for $40M

AUSTIN, Texas, January 26, 2011 - Silicon Laboratories Inc. (Nasdaq: SLAB), a leader in high-performance, analog-intensive, mixed-signal ICs, today announced the acquisition of Silicon Valley-based SpectraLinear, a late-stage private company offering integrated timing solutions. Silicon Labs acquired the talented SpectraLinear team and a complementary portfolio of programmable clock ICs for approximately $40 million.

SpectraLinear’s family of low-power, highly programmable and small-footprint silicon clocking solutions is optimized for consumer electronics and embedded applications such as portable media players, residential gateways and digital cameras. Similar to Silicon Labs’ approach in the middle and high end of the timing market, SpectraLinear leverages a high level of integration and programmability in its product architectures to address cost-sensitive, high-volume applications. The company’s customer base includes industry leaders in the consumer market including portable device, handset and communications gear makers.

SpectraLinear’s innovative clock products complement Silicon Labs’ existing timing product line, by adding a broad family of ICs that Silicon Labs believes will accelerate penetration of the approximately $500 million opportunity in high-volume applications.

“By offering strong product synergies, tier one customer alignment and an immediate footprint in the timing subsystem of consumer devices, this acquisition further establishes Silicon Labs as a one-stop timing solution provider,” said Mark Downing, vice president of strategy and business development. “We have established a successful timing portfolio organically in high-performance applications, more than doubling our timing revenue since 2008 to greater than 10 percent of our business. We believe our acquisition of CMOS-based MEMS resonator technology in 2010 followed by today’s acquisition of SpectraLinear will enable Silicon Labs to accelerate market share gains in the timing market.”

“This combination will allow us to leverage Silicon Labs’ greater resources and sales channel to reach a broader set of customers globally,” said Ilhan Refioglu, CEO of SpectraLinear. “We believe the product line synergy will allow us to hit the ground running and rapidly capitalize on new revenue opportunities.”

SpectraLinear is based in Santa Clara, California, with design centers in Bangalore, India, and Istanbul, Turkey. The acquisition will bring 19 patents issued or pending and a team of 44 employees to Silicon Labs. The acquisition is expected to be accretive to earnings, excluding the amortization of intangibles, in its first full quarter of operations in 2011.

Ramtron's CEO resigns - SEC 8K Filing

On January 26, 2011, Ramtron International Corporation announced that William W. Staunton resigned as Chief Executive Officer and a director of the Company, effective January 24, 2011. The Company and Mr. Staunton have agreed that his resignation will constitute a termination of employment as of January 24, 2011. The Company and Mr. Staunton also terminated as of January 24, 2011, Mr. Staunton’s Change in Control Severance Agreement. In connection with his resignation the Company agreed to pay Mr. Staunton an amount equal to his current salary on his normal payroll schedule, and to continue his current health plan benefits, through January 24, 2012. Mr. Staunton’s resignation is not a result of any disagreement with the Company or its executive officers, or any matter relating to the Company’s operations, policies or practices.

On January 26, 2011, the Company also announced that Eric A. Balzer, the Company’s Chief Financial Officer has been appointed to be Chief Executive Officer of the Company. Mr. Balzer will continue his position as Chief Financial Officer, until his replacement in that position is appointed. Mr. Balzer’s current compensation will remain unchanged in his position as Chief Executive Officer. Mr. Balzer was elected a director of the Company in September 1998 and was named the Company’s Chief Financial Officer in October 2004. He also served on the Company’s audit committee from 1999 to 2004.

Monday, January 24, 2011

ISSI Announces Acquisition of Si En Integration Holdings Limited

SAN JOSE, Calif., Jan. 24, 2011 /PRNewswire/ -- Integrated Silicon Solution, Inc. (Nasdaq: ISSI) today announced that it has signed a definitive agreement to acquire Si En Integration Holdings Limited ("Si En"), a privately held fabless provider of high performance analog and mixed signal integrated circuits headquartered in Xiamen, China. Si En targets the mobile communications, digital consumer, networking, and automotive markets with high quality analog products. For the year endedDecember 31, 2010, Si En had revenue of $22.2 million, gross margin of 42.5 percent, and operating income of $5.2 million. The purchase price will be approximately $20 million in cash, based on estimated working capital and net of cash acquired. The transaction is subject to customary closing conditions and is expected to be completed in the current quarter. ISSI expects the acquisition to be immediately accretive to earnings per share.

Commenting on the transaction, Scott Howarth, president and CEO of ISSI, stated, "This acquisition diversifies our product portfolio by adding complementary technologies to our market-proven SRAM and DRAM technologies. We obtain higher margin analog and mixed signal products to sell into our current end markets, while strengthening our overall business and presence in the growing Chinese market. We believe Si En's products, design expertise and proprietary technologies will further increase our growth and profit potential by expanding our market share at existing and new customers."

Founded in 2005, Si En's current products include: audio power amplifiers used in cells phones, GPS devices, MP3 players and conference phones; LED drivers for backlighting and panel display used in cell phones, digital cameras, notebook computers and other computing and consumer applications; voltage converters used in industrial applications; and temperature sensors for computing, networking and industrial applications. Si En has been named one of the top ten IC design companies in China at the International IC-China Conference and Exhibition in both 2010 and 2009.

"By joining an established leader in semiconductor solutions, Si En will be able to leverage ISSI's strong sales and operational framework to further grow our business in China as well as other key global markets," said Sai Luen Ting, Si En chairman and CEO. "I am very excited about combining our analog and mixed signal expertise with ISSI's global capabilities to create a broader, more diversified business."

About ISSI

ISSI is a fabless semiconductor company that designs and markets high performance integrated circuits for the following key markets: (i) digital consumer electronics, (ii) networking, (iii) mobile communications, (iv) automotive electronics, and (v) industrial, medical, and military. ISSI is headquartered in Silicon Valley with worldwide offices in Taiwan, Japan, Singapore,China, Europe, Hong Kong, India, and Korea. Visit our web site at

About Si En

Si-En is a fabless semiconductor company that designs, develops and markets high performance analog and mixed-signal integrated circuits for the following key markets: mobile communications, digital consumer electronics, networking, and automotive electronics. Its primary products are audio amplifiers, LED drivers, power management and temperature sensors. Si En is headquartered in Xiamen, China. The web site is

Power Integrations awarded additional $6M damages from Fairchild

The United States District Court for the District of Delaware has awarded Power Integrations double damages in their successful patent infringement lawsuit against Fairchild Semiconductor. Quoting from last week's court opinion," Thus, the Court, under the totality of the circumstances, will not treble damages but will instead award an increase of doubling the original approximately $6 million dollar award. This enhancement will sufficiently serve the punitive function of enhanced damages. Therefore, Power's motion for enhanced damages is GRANTED to the extent that Power's damages will be enhanced two times (i.e., 200 percent). Fairchild will be ordered to pay Power damages in the amount of $12,233,441.16."

Friday, January 21, 2011

Ramius presses forward to replace Zoran board

From an SEC 14A filing on January 21, 2011:

NEW YORK, Jan. 21, 2011 -- Ramius Value and Opportunity Advisors LLC, a subsidiary of Ramius LLC (collectively, "Ramius"), today announced it has filed an investor presentation with the Securities and Exchange Commission ("SEC") in connection with its consent solicitation seeking to remove and replace six members of the Zoran Corporation (Nasdaq: ZRAN - News) Board of Directors with Ramius' highly qualified nominees.

In the investor presentation, Ramius makes a case that change on the Board of Directors is warranted given (a) long-term fundamental underperformance, (b) that Ramius' proposed plan to enhance value at Zoran is better than the Company's current plan, and (c) that the Ramius nominees are more qualified to oversee a successful turnaround of Zoran than the incumbent Board members.

Ramius is one of the largest shareholders of Zoran, beneficially owning approximately 9.3% of the shares outstanding. Holders of Zoran shares as of the close of business on January 7, 2011, the record date for the Consent Solicitation, are entitled to execute and deliver a WHITE consent card in support of Ramius' proposals.

The investor presentation is available at the SEC's website at and will also be available at .

Highlights of the presentation include:

· The current Board has overseen an extended period of underperformance.

· Zoran's stock price has underperformed peers materially over the last one-, three-, and five-year periods (underperformance versus the peer group of -76.8%, -69.4%, and -82.3% over the last one-, three-, and five-year periods, respectively)

· The current Board has overseen poor allocation of corporate resources marked by significant expenditures on R&D and acquisitions that have failed to produce shareholder value (over the past six years Zoran has spent $800 million on research and development and acquisitions yet, as of December 3, 2010, the Company had an enterprise value of merely $100 million)

· Zoran's strategy to create value for shareholders is highly questionable.

· Zoran's proposed solution to improve revenue in DTV by investing heavily in R&D to penetrate the tier-one market is a flawed strategy that may result in continued losses

· Zoran's plan to improve its DTV business with the acquisition of Microtune is a flawed business proposition

· Ramius' Nominees have a better plan to create value at Zoran by taking steps to greatly improve profitability.

· Explore strategic alternatives to maximize value for the DTV business and minimize future losses

· Refocus the Microtune segment on the highly profitable cable business and exit or reduce expenses in the underperforming DTV business

· Significantly reduce operating expenses to return the DVD segment to profitability

· Facilitate strengthening of Zoran's financial, segment, management and external reporting to provide more complete and relevant information to shareholders

· The current Zoran Board collectively has limited industry experience, minimal vested financial interest and an average Board tenure of 20 years.

· For the last three years, Zoran has ignored ISS' recommendation that Zoran seek new Board members.

· Ramius' nominees have strong relevant experience and are committed to representing the best interests of all Zoran stockholders.

If you have any questions, require assistance with submitting your WHITE consent card, or need additional copies of the proxy materials, please contact:

Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, NY 10022
Shareholders Call Toll-Free at: (877) 717-3898
Banks and Brokers Call Collect at: (212) 750-5833


Ramius LLC is a registered investment advisor that manages assets in a variety of alternative investment strategies. Ramius LLC is headquartered in New York with offices located in London, Luxembourg, Tokyo and Munich.

Thursday, January 20, 2011

Trident Microsystems CEO and President both resign

SUNNYVALE, Calif., Jan. 19, 2011 – Trident Microsystems, Inc. (NASDAQ: TRID), a leading provider of set-top box and TV semiconductor solutions, today announced that Sylvia Summers Couder has resigned as CEO and as a director to pursue other opportunities. The company also announced that Mr. Philippe Geyres has been appointed as Interim CEO effective immediately and that the company has initiated a search for a CEO following this transition. Mr. Geyres is a candidate for the permanent CEO position.

“Sylvia Summers’ accomplishments at Trident have been substantial. She oversaw a significant management transition early in her tenure and worked closely with the board to reposition the company. We greatly appreciate her efforts and leadership, including the recent management of the integration of the NXP and Micronas assets and the cost reductions that have been achieved,” said David Courtney, Chairman of the Board.

“We are pleased and excited that Philippe Geyres has agreed to assume the role of Interim CEO. We believe his background and experience will be quite helpful during this transition and that he will bring a valuable perspective and focus to our business,” said Mr. Courtney.

Mr. Geyres joined Trident’s board in February 2010 following the company’s acquisition of certain assets of NXP. Mr. Geyres has substantial executive experience. He was CEO of Oberthur Card Systems, a French publicly listed smart card company during 2007 and 2008. He was previously an executive at ST Microelectronics from 1983 to 2006, most recently as Executive Vice President, Consumer and Telecom Products. Prior to that, he held positions at Fairchild Semiconductor and IBM. Mr. Geyres serves as a member of the board of directors of Advanced Digital Broadcast, a Swiss company listed in Zurich, and of Arteris, a privately held networking IP company.

The company also announced that Christos Lagomichos has announced his departure from Trident and resignation as its President effective Feb. 9, 2011.

“We want to thank Mr. Lagomichos for his service to Trident, and particularly the assistance he has provided in implementing our transition plan following the transaction with NXP,” said Mr. Courtney.

Hittite Microwave Acquires Arctic Silicon Devices

Chelmsford, MA - Hittite Microwave Corporation (Nasdaq: HITT) today announced it has acquired Arctic Silicon Devices, a developer of advanced mixed-signal integrated circuit (IC) technology, located in Trondheim, Norway. The acquisition price was approximately $12.0 million in cash and equity.

The acquisition provides Hittite with new IC design and integration capability and a state-of-the-art product line of analog-to-digital converters (ADCs). Arctic Silicon Devices has successfully designed and launched innovative, multifunction low power ADC products which target high performance applications, including test and measurement systems and communication infrastructure. The employees of Arctic Silicon Devices will continue to work at their existing facility.

About Hittite Microwave Corporation

Hittite Microwave Corporation is an innovative designer and manufacturer of high performance integrated circuits, or ICs, modules, subsystems and instrumentation for technically demanding digital, RF, microwave and millimeterwave applications covering DC to 110 GHz. The Company's standard and custom products apply analog, digital and mixed-signal semiconductor technologies, which are used in a wide variety of wireless / wired communication and sensor applications for Automotive, Broadband, Cellular Infrastructure, Fiber Optics, Microwave & Millimeterwave Communications, Military, Test & Measurement, and Space markets. The Company is headquartered in Chelmsford, Massachusetts.

About Arctic Silicon Devices

Arctic Silicon Devices is a private fabless semiconductor company based in Trondheim, Norway previously owned by the employees, Incitia Ventures and ProVenture. Arctic Silicon Devices aims to be a preferred partner for leading companies within high performance applications providing state-of-the-art Front End ICs like Data Converter Standard Products or Application Specific Standard Products based on data converter cores. The ASD products include ultra low power dissipation, ease of use, and cost efficiency, while maintaining state-of-the-art performance.

Friday, January 14, 2011

Dialectic Capital Partners names their nominees to Advanced Analogic's Board

From today's 13D filing:
On January 13, 2011, DCP delivered a letter to the Issuer nominating John Fichthorn and J. Michael Gullard as set forth therein, and announcing its intention to solicit proxies for their election to the Issuer’s Board of Directors at the Issuer’s 2011 annual meeting of stockholders, or any other meeting of stockholders held in lieu thereof, and any adjournments, postponements, reschedulings or continuations thereof.
Dialectic Capital Partners earlier challenge letter may be found here.
A post on Dialectic's 2009 challenge to California Micro Devices may be found here. California Micro Devices ultimately agreed to be acquired by ON Semiconductor in December 2009.

Intel and WiLAN Reach Agreement to End Litigations

OTTAWA, Canada – January 14, 2011 – Wi-LAN Inc. (TSX:WIN), a leading technology innovation and licensing company, today announced that Intel Corporation and WiLAN have signed a memorandum of understanding which calls for Intel to take a multi-year license to WiLAN’s patent portfolio and to make a series of payments to WiLAN. The agreement will include the dismissal of all litigations between the companies in the U.S. District Court for the Eastern District of Texas and in the U.S. District Court for the Northern District of California. WiLAN expects a final definitive agreement to be signed within the next few weeks. Specific financial terms of the agreement reached are confidential.

Wednesday, January 12, 2011

Kopin Acquires Forth Dimension Displays

Taunton, Mass., January 11, 2011 – Building on its leadership in full-color microdisplay technology for high-performance applications, Kopin Corporation (NASDAQ: KOPN) today announced that it has acquired all of the outstanding common stock of Scotland-based Forth Dimension Displays Ltd. (FDD), an industry leading provider of all-digital, ultrahigh-resolution, near-to-eye ferroelectric reflective microdisplays. The purchase price was approximately $11 million in cash plus an earnout provision if certain revenue milestones are reached within one year of the purchase date.

“Our acquisition of FDD opens new market opportunities for Kopin and expands our product offerings to our customers,” said Kopin President and Chief Executive Officer Dr. John C.C. Fan. “FDD’s ultrahigh-resolution reflective microdisplay is already used extensively within a variety of applications such as high-performance cinematography, training and simulation, 3D metrology and medical imaging. Its proprietary Time Domain Imaging (TDI™) technology provides beautiful high-resolution, full-color images that are critical for these high-end applications. Kopin is the leading transmissive microdisplay company in the world, and with this acquisition we will be the only microdisplay manufacturer that can offer complete system solutions with either reflective or transmissive liquid crystal display technologies,” Dr. Fan continued. “We are delighted to welcome the company’s employees to the Kopin family.”

Greg Truman, Chief Executive Officer of FDD, said, “FDD has enjoyed a very successful 2010 with design wins with several high-performance cinematography camera manufacturers. FDD is delighted to become part of Kopin, and we look forward to contributing our technology expertise to new product applications and markets.”

FDD had approximately $6 million of revenue in 2010 and Kopin projects that FDD will be accretive to 2011 earnings. All of FDD’s key employees have agreed to join Kopin.

Tuesday, January 11, 2011

Advanced Analogic faces challenge from Dialectic Capital Partners

From today's 13D filing:

Advanced Analogic Technologies Incorporated
830 East Arques Avenue
Sunnyvale, California 94085

Attn: Board of Directors

Dear Members of the Board:

Dialectic Capital Partners, LP, together with its affiliates, currently own 2,960,629 shares of Common Stock of Advanced Analogic Technologies Incorporated (the “Company”), constituting approximately 7.0% of the outstanding shares. As significant stockholders of the Company, we are troubled by the Company’s disappointing stock price performance. In our view, this is a reflection of poor financial performance and a failure to execute a viable growth strategy. We believe these issues are directly attributable to the current management and the Board, who must be held accountable for the losses endured by long-term stockholders. Accordingly, we intend to nominate individuals for election to the Board at the Company’s 2011 annual meeting of stockholders (the “2011 Annual Meeting”). We believe the election of our independent nominees will help ensure the best interests of stockholders are properly represented on the Board.

As you are aware, since the Company’s IPO the Company has been unable to maintain consistent growth or profitability. Although the CEO is a highly respected engineer, we believe he has failed to translate his engineering talents into consistent profits for shareholders. In addition, the Chairman has a history of unsuccessful related party transactions involving other entities, and we would be disappointed if we discovered that he is leading the Company down a similar path.

That is why we strongly believe a reconstituted Board with independent stockholder representatives is required to reverse the long, steep decline in stockholder value. In our opinion, a reconstituted Board focused on reviewing all strategic alternatives, including a sale of the Company, presents the best opportunity of increasing value for all stockholders. Accordingly, we intend to hold the Board fully accountable for any ill-advised transactions or other actions that erode stockholder value until stockholders have an opportunity to vote at the 2011 Annual Meeting.

Very truly yours,

Dialectic Capital Partners, LP

Monday, January 10, 2011

Intel and NVIDIA sign Patent Cross License Agreement with $1.5B payments to NVIDIA

From today's SEC 8K filing: Under the patent cross license agreement, Intel has granted to NVIDIA and its qualified subsidiaries, and NVIDIA has granted to Intel and Intel’s qualified subsidiaries, a non-exclusive, non-transferable, worldwide license, without the right to sublicense to all patents that are either owned or controlled by the parties at any time that have a first filing date on or before March 31, 2017, to make, have made (subject to certain limitations), use, sell, offer to sell, import and otherwise dispose of certain semiconductor- and electronic-related products anywhere in the world. NVIDIA’s rights to Intel’s patents have certain specified limitations, including but not limited to, NVIDIA is not licensed to: (1) certain microprocessors, defined in the agreement as “Intel Processors” or “Intel Compatible Processors;” (2) certain chipsets that connect to Intel Processors; and (3) certain flash memory products. Subject to the terms and conditions of the patent cross license agreement, Intel will pay NVIDIA licensing fees which in the aggregate will amount to $1.5 billion, payable in annual installments, as follows: a $300 million payment on each of January 18, 2011, January 13, 2012 and January 15, 2013 and a $200 million payment on each of January 15, 2014, 2015 and 2016.

The term of the patent cross license agreement continues until the expiration of the last to expire of the licensed patents, unless earlier terminated. NVIDIA may terminate the patent cross license agreement if Intel fails to make the required payments under the patent cross license agreement and fails to cure such non-payment within 60 days. In addition, the patent cross license agreement may be terminated in whole or in part under certain circumstances with respect to a party, if such party declares bankruptcy or undergoes a change of control.

SMSC to Acquire Conexant Systems, Inc.

Hauppauge, New York and Newport Beach, California – January 10, 2011 - SMSC (NASDAQ: SMSC), a leading semiconductor company providing Smart Mixed-Signal Connectivity™ solutions, and Conexant Systems, Inc. (NASDAQ: CNXT), a leading supplier of innovative semiconductor solutions for imaging, audio, embedded modem, and video surveillance applications, today announced the signing of a definitive agreement under which SMSC will purchase all of the outstanding shares of Conexant in a stock and cash transaction valued at approximately $284 million including the assumption of Conexant’s net debt. The transaction has been approved by the boards of directors of both companies.

Combined Company Highlights:
  • Complementary connectivity product portfolios to target more expansive set of computing, consumer, industrial and automotive applications,
  • Serves key customers with more complete product solutions,
  • Creates a stronger analog/mixed-signal R&D team with over 900 engineers globally,
  • Combined company has the scale and resources to enhance SMSC’s financial model with a combined trailing twelve month revenue of approximately $632 million,
  • Anticipated annualized pre-tax cost synergies of $8 to $10 million by the end of SMSC’s fourth quarter of fiscal 2012,
  • Acquisition expected to be accretive to non-GAAP gross margins, non-GAAP operating margins and non-GAAP earnings per share immediately upon closing.
The combination of Conexant’s imaging, audio, embedded modem and video products with SMSC’s broad connectivity solutions targeting the computing, consumer, industrial and automotive markets provides for a highly complementary merger of talent and technology. Headquartered in Newport Beach, California, Conexant has approximately 600 employees worldwide, including over 230 in Asia.

“We believe that combining the growth potential of Conexant and SMSC will allow us to leverage complementary technology and engineering resources to provide our customers with expanded solutions in connectivity and content,” said Christine King, President & Chief Executive Officer of SMSC. “We plan to focus our resources on the areas of highest return and believe that our respective sales and supply chain relationships will help create a platform to grow our businesses. We expect the acquisition will be accretive to non-GAAP EPS immediately upon close. In addition, we expect to capture significant operating efficiencies that will position us to increase earnings growth. SMSC’s larger scale should position us to increase our R&D productivity and drive profitability and shareholder value.”

“In our industry, size and scope provide a significant advantage with customers and suppliers," said Scott Mercer, Conexant's Chairman and Chief Executive Officer. "SMSC and Conexant share similar core competencies in analog and mixed-signal design, possess complementary product portfolios, and count many customers in common. By joining forces, we get the opportunity to take advantage of economies of scale and drive profitable growth. I am convinced that combining our companies will best serve the interests of Conexant stockholders, customers, and employees moving forward."

Sailesh Chittipeddi, currently President & Chief Operating Officer at Conexant, will join SMSC upon close of the acquisition as Executive Vice President, reporting to Christine King. Mr. Chittipeddi’s responsibilities will include all product lines and global marketing and engineering functions for SMSC. Mr. Chittipeddi joined Conexant in 2006. In his role as President & Chief Operating Officer, he had worldwide responsibility for engineering, operations, quality and marketing.

Under the terms of the agreement, for each share of Conexant that they own, Conexant stockholders will receive approximately $2.25 consisting of $1.125 in cash and a fraction of a share of SMSC common stock equal to $1.125 divided by the volume weighted average price of SMSC common stock for the 20 trading days ending on the second trading day prior to closing, but in no event more than 0.04264 nor less than 0.03489 shares of SMSC common stock. The total cash consideration to be paid in the transaction is approximately $98 million and the total number of shares of SMSC common stock to be issued (including the assumption of outstanding Conexant restricted stock units) is approximately 2.9 to 3.6 million. The transaction is expected to close in the first half of calendar 2011 subject to the satisfaction of regulatory requirements, approval by Conexant shareholders and other customary closing conditions. SMSC expects to realize approximately $8 to $10 million in annualized pre-tax cost synergies by the end of SMSC’s fourth quarter of fiscal 2012 as a result of the consolidation of support functions and optimization of the supply chain across a larger base.

Wednesday, January 5, 2011

Qualcomm to Acquire Atheros

SAN DIEGO AND SAN JOSE — January 5, 2011 — Qualcomm Incorporated (NASDAQ: QCOM) and Atheros Communications, Inc. (NASDAQ: ATHR), today announced that they have entered into a definitive agreement whereby Qualcomm intends to acquire Atheros, a leader in innovative technologies for wireless and wired local area connectivity in the computing, networking and consumer electronics industries. The acquisition is intended to help accelerate the expansion of Qualcomm’s technologies and platforms to new businesses beyond cellular and provide access to significant new growth opportunities.

Qualcomm has entered into a definitive agreement to purchase Atheros for $45 per share in cash, representing an enterprise value of $3.1 billion. The transaction has been approved by the Qualcomm and Atheros boards of directors and is subject to customary closing conditions, including the receipt of domestic and foreign regulatory approvals and the approval of Atheros’ stockholders. The transaction is expected to close in the first half of 2011. Excluding amortization of acquired intangibles, Qualcomm expects the acquisition to be modestly accretive to earnings per share in fiscal year 2012, the first full year of combined operations. Qualcomm intends to finalize its estimates of the transaction’s financial impact, as well as the accounting for the transaction, upon deal close.

“It is Qualcomm’s strategy to continually integrate additional technologies into mobile devices to make them the primary way that people communicate, compute and access content. This acquisition is a natural extension of that strategy into other types of devices,” said Dr. Paul E. Jacobs, chairman and CEO of Qualcomm. “The combination of Qualcomm and Atheros is intended to accelerate this opportunity by utilizing best-in-class products for communications, computing and consumer electronics to broaden existing customer relationships and expand access to new partners and distribution channels.”

Atheros’ current president and CEO, Dr. Craig H. Barratt, is expected to join Qualcomm as president of Qualcomm Networking & Connectivity.

Monday, January 3, 2011

Relational Investors reduces its National Semiconductor holdings

Continuing to unwind its position in National Semiconductor, activist fund Relational Investors has disclosed that it sold 1.972M shares in December. They continue to hold 20.6M shares (8.61% of the outstanding) at a basis of $16.29 (today's close $13.89). The saga of Relational and National began in 2003 with an aggressive stock accumulation followed by threats to nominate individuals to the Board of Directors.

The most recent amended SEC 13D filing notes, "Reporting Persons intend to closely monitor the Company’s performance and may modify their plans. In addition, the Reporting Persons and their representatives and advisers may communicate with other stockholders, industry participants and other interested parties concerning the Company. Reporting Persons do not have any plans other than the monitoring and communication program outlined in the previous paragraph, the Reporting Persons may exercise any and all of their respective rights as stockholders of the Company in a manner consistent with their equity interests, including seeking representation on the Company’s board of directors at a special or annual meeting of the Company’s stockholders."

Update from a January 19th 13D filing: Relational Investors continue to sell and now hold 17,725,300 shares (7.35% of the outstanding).