IRVINE and MOUNTAIN VIEW, Calif., July 19, 2005 /PRNewswire-FirstCall via COMTEX/ -- Broadcom Corporation (Nasdaq: BRCM), a global leader in wired and wireless broadband communications semiconductors, today announced that it has signed a definitive agreement to acquire Siliquent Technologies, Inc., a privately-held developer of 10 Gigabit Ethernet (10GbE) network interface controllers (NICs) with advanced Ethernet processing technology for server networking, network storage and clustering applications. Headquartered in Mountain View, with research and development facilities in Tel Aviv, Israel, Siliquent(TM) develops Ethernet controllers that boost server performance. Siliquent's advanced Ethernet processing technology enables servers to improve overall application performance while taking advantage of the emerging convergence of data, storage and clustering technologies into a single, standards-based Ethernet fabric.
The acquisition of Siliquent significantly accelerates Broadcom's delivery of 10GbE converged-NICs (C-NICs) for server LAN-on-motherboard (LOM) applications. According to NIC and LOM market share and forecast reports from Gartner Dataquest, 10GbE will be a significant market opportunity for enterprise networks since it enables a 10x increase in network bandwidth over today's 1GbE technology. This rise in bandwidth is driven by increased use and build out of the broadband network infrastructure, more desktops running 1GbE, growing usage of network-intensive applications and even greater amounts of user data stored and accessed on the network. Gartner Dataquest predicts that 10GbE technology will begin its volume ramp in servers beginning in 2007.
Blade servers are believed to be one of the likely early adopters of 10GbE C-NIC technology. By completely integrating multiple servers and a switch into a single chassis, the blade server's networking communications occurs over an internal electrically connected backplane. Through the use of low-cost serializers/deserializers (SerDes) technology, blade servers avoid the need for expensive, power-intensive optical transceivers and fiber optic cables associated with the deployment of 10GbE technology. Because 10 Gigabit Ethernet C-NICs are able to integrate the SerDes function, many blade servers that are already designed to support 10 gigabit speeds are ready to accept a 10GbE C-NIC solution.
The Siliquent 10GbE advanced Ethernet processing technology, combined with the use of low-cost 10 gigabit SerDes, enables a more simplified blade server design that can operate on a standard, single Ethernet fabric. The advantages of this 10GbE single fabric approach in the blade server environment are significant when contrasted against the current practice of implementing multiple communications fabrics (i.e. Ethernet for networking, Fibre Channel for block storage, proprietary solutions or Infiniband for clustering), each of which require a communications card on every server and a separate switch, consuming even more backplane space. According to IDC's "Worldwide Blade Server 2004-2008 Forecast," blade server shipments are expected to grow to 30% of server shipments by 2008.
"With 10GbE being the next frontier for enterprise networks, our acquisition of Siliquent provides technology that enables Broadcom to deliver TCP/IP offload, iSCSI and RDMA capabilities on a single-chip, 10GbE controller," said Greg Young, Vice President and General Manager of Broadcom's High-Speed Controller Line of Business. "10GbE completes our C-NIC vision and levels the performance playing field against competitive network fabrics such as Infiniband and Fibre Channel, enabling Broadcom to unify the data center around a single ubiquitous, standards-based Ethernet fabric that delivers higher levels of performance and improved network communications."
At closing of the acquisition, Broadcom expects to pay approximately $76 million in cash in exchange for all outstanding shares of capital stock and vested options of Siliquent. A portion of the consideration payable to the shareholders will be placed into escrow pursuant to the terms of the acquisition agreement. Broadcom will also assume all unvested employee stock options of Siliquent, which will entitle the holders to receive up to approximately 200,000 shares of Broadcom Class A common stock upon vesting. The boards of directors of each of the companies and the shareholders of Siliquent have approved the merger. The closing, which is expected to occur during Broadcom's third fiscal quarter ending September 30, 2005, remains subject to customary closing conditions, including expiration of the waiting period under the Hart-Scott-Rodino Act. Broadcom may record a one-time charge for purchased in-process research and development expenses related to the acquisition in its third fiscal quarter. The amount of that charge, if any, has not yet been determined.
About Siliquent Technologies
Siliquent Technologies, Inc. is a fabless semiconductor company dedicated to expanding Ethernet's applications across the entire enterprise - for storage, high-performance computing, and all networking applications. The company's new 10GbE processors are designed to enable a new generation of intelligent NICs that make it possible to run storage, networking and clustering over a single physical Ethernet interface - creating the unified wire. Founded in 2001, the company currently has 59 employees.
Broadcom Corporation is a global leader in wired and wireless broadband communications semiconductors. Our products enable the convergence of high- speed data, high definition video, voice and audio at home, in the office and on the go. Broadcom provides manufacturers of computing and networking equipment, digital entertainment and broadband access products, and mobile devices with the industry's broadest portfolio of state-of-the-art system-on- a-chip and software solutions. These solutions support our core mission: Connecting everything(R).
Broadcom is one of the world's largest fabless semiconductor companies, with annual revenue of more than $2 billion. The company is headquartered in Irvine, Calif., with offices and research facilities in North America, Asia and Europe. Broadcom may be contacted at 1-949-450-8700 or at http://www.broadcom.com .
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All statements included or incorporated by reference in this release, other than statements or characterizations of historical fact, are forward- looking statements. These forward-looking statements are based on our current expectations, estimates and projections about our industry and business, management's beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "may," "will," "should," "would," "could," "potential," "continue," "ongoing," similar expressions, and variations or negatives of these words. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement.
Important factors that may cause such a difference for Broadcom in connection with the acquisition of Siliquent Technologies, Inc. include, but are not limited to, the risks inherent in acquisitions of technologies and businesses, including the timing and successful completion of technology and product development through volume production, integration issues, costs and unanticipated expenditures, changing relationships with customers, suppliers and strategic partners, potential contractual, intellectual property or employment issues, accounting treatment and charges, and the risk that anticipated benefits of the acquisition may not be realized; general economic and political conditions and specific conditions in the markets we address, including the volatility in the technology sector and semiconductor industry, trends in the broadband communications markets in various geographic regions, and possible disruption in commercial activities related to terrorist activity or armed conflict in the United States and other locations; the rate at which our present and future customers and end-users adopt Broadcom's and Siliquent's technologies and products in the markets for high-speed networking applications; delays in the adoption and acceptance of industry standards in those markets; our ability to scale our operations in response to changes in demand for our existing products and services or demand for new products requested by our customers; intellectual property disputes and customer indemnification claims and other types of litigation risk; the timing, rescheduling or cancellation of significant customer orders and our ability, as well as the ability of our customers, to manage inventory; our ability to retain, recruit and hire key executives, technical personnel and other employees in the positions and numbers, with the experience and capabilities, and at the compensation levels needed to implement our business and product plans; our ability to timely and accurately predict market requirements and evolving industry standards and to identify opportunities in new markets; our ability to specify, develop or acquire, complete, introduce, market and transition to volume production new products and technologies in a cost- effective and timely manner; the gain or loss of a key customer, design win or order; competitive pressures and other factors such as the qualification, availability and pricing of competing products and technologies and the resulting effects on sales and pricing of our products; the timing of customer-industry qualification and certification of our products and the risks of non-qualification or non-certification; changes in our product or customer mix; the volume of our product sales and pricing concessions on volume sales; the availability and pricing of third party semiconductor foundry and assembly capacity and raw materials; fluctuations in the manufacturing yields of our third party semiconductor foundries and other problems or delays in the fabrication, assembly, testing or delivery of our products; the risks of producing products with new suppliers and at new fabrication and assembly facilities; the effects of new and emerging technologies; problems or delays that we may face in shifting our products to smaller geometry process technologies and in achieving higher levels of design integration; the quality of our products and any remediation costs; the effectiveness of our expense and product cost control and reduction efforts; the risks and uncertainties associated with our international operations, particularly in light of recent events; the effects of natural disasters, public health emergencies, international conflicts and other events beyond our control; the level of orders received that can be shipped in a fiscal quarter; and other factors.
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Broadcom(R), the pulse logo, Connecting everything(R), and the Connecting everything logo are among the trademarks of Broadcom Corporation and/or its affiliates in the United States, certain other countries and/or the EU. Siliquent(TM)is a trademark of Siliquent Technologies, Inc. Any other trademarks or trade names mentioned are the property of their respective owners.
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