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NetLogic-RMI preps for multicore battle

Posted: 07 Jul 2009 ?? ?Print Version ?Bookmark and Share

Keywords:multicore? processor? embedded? network?

NetLogic Microsystems Inc.'s recent move to buy RMI Corp. will help the multicore processor specialist to devise new products more rapidly, according to executives. The move will also intensify the battle in the emerging embedded multicore sector.

During a July 1 press event, RMI expanded the capabilities of its existing XLR and XLS multicore lines. It also tipped plans to develop future products for the control plane and data center.

As reported, networking chip maker NetLogic last month acquired RMI, a supplier of multicore networking processors, for $175.4 million in stock and $8 million in cash. An additional $6.5 million would be paid if certain business objectives are reached.

The deal is expected to intensify the emerging embedded multicore processor space. With the acquisition of RMI, NetLogic will compete against the likes of AMCC, Cavium, Freescale and Intel among others.

RMI and NetLogic claim that they are ahead of the competition in multicore processors for embedded applications. But they also acknowledged that there are several challenges ahead, notably the ability to invest in new and scalable designs.

With the help of NetLogic, RMI will be able to "accelerate" the development of its next-generation devices in the market, said Ron Jankov, president and CEO of NetLogic, at a press event.

NetLogic's portfolio includes knowledge-based processors, content processors, network search engines and 10- to 100GbE PHY products. Recently, NetLogic announced general availability of its NL33100 NETLite processor that delivers double the performance and IPv4/IPv6 database density compared to competitive solutions.

String of acquisitions
Since 2006, the networking chipmaker has made four separate acquisitions. In 2006, Cypress Semiconductor Corp. exited the search-engine chip business, selling the assets to NetLogic. The deal was worth up to $70 million.

Then, in 2007, NetLogic acquired privately-held Aeluros Inc., a fabless supplier of network interface and chip technologies, for $57 million in cash. Aeluros supplies 10Gbit Ethernet interface technologies. The interface technology is used in so-called "knowledge-based processors," which NetLogic designs.

In April of 2009, NetLogic moved to corner the search-engine IC business. It entered into a definitive agreement to acquire certain assets associated with Integrated Device Technology Inc.'s network search-engine products. These products and technologies will complement and further expand NetLogic's existing portfolio of knowledge-based processors.

Under the terms of the agreement, NetLogic Microsystems will pay IDT $90 million, plus the cost of inventory on hand on the closing date. At closing, NetLogic Microsystems, at its option, may pay the entire purchase price in cash or pay $60 million, plus the cost of inventory in cash and issue to IDT a $30 million secured promissory note payable in two equal installments on the first and second anniversaries of the closing date.

"Market diversification is a big thing for us," Jankov said, referring to the company's recent moves.

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