LSI Logic buys C-Cube

Acquisition pairs digital video with decoder technology

By Michael Grotticelli -- Broadcasting & Cable, 4/2/2001

LSI Logic Corp., Milpitas, Calif., has agreed to acquire chip maker C-Cube Microsystems Inc., in a stock-for-stock transaction valued at approximately $878 million. LSI Logic said it expects to complete the transaction in June.

With both companies focused on advances in computer chips and silicon necessary for compression to facilitate interactive on-screen display, the merger could speed the development and time to market of set-top boxes and cable modems with downloadable software applications. Executives for both companies stated that the new combination will enable the pairing of LSI's digital video products-such as encoders and codecs-with C-Cube's decoder technology.

LSI Chairman and CEO Wilfred J. Corrigan said there will be minimal overlap in products and no layoffs are expected. He added that acquiring C-Cube allows LSI Logic to further target the satellite, terrestrial and DSL markets and "gives us immediate entry in to the U.S and European cable markets."

C-Cube, which reported $265 million in revenues in 2000, employs nearly 600 worldwide and is also headquartered in Milpitas. Its customers include Sony, Samsung, LG Electronics, JVC, Motorola, Pace and Philips.