Broadcom has agreed to buy NetLogic Microsystems for $3.7bn to increase its presence in the network infrastructure market. Broadcom’s current main markets are at the consumer products end of the communications market. The purchase price is net of NetLogic’s cash of $220m.
"With NetLogic Microsystems, Broadcom is acquiring a leading multi-core embedded processor solution, market leading knowledge-based processors, and unique digital front-end technology for wireless base stations that are key enablers for the next generation infrastructure build-out,” says Broadcom CEO Scott McGregor,
NetLogic’s chips handle complex network traffic to enhance 3G/4G mobile wireless infrastructure, data centre, enterprise, metro Ethernet, edge and core infrastructure networks. Products include network processors, knowledge-based processors, content processors, network search engines, digital front end processors and 10/40/100 Gigabit Ethernet PHY chips for switches, routers, wireless base stations, security appliances, networked storage appliances, service gateways and connected media devices.
Broadcom says the acquisition will enable it to address all 7 layers in the OSI model and will more than double its addressable infrastructure market to around $12bn while giving it ‘significant opportunities’ in the wireless infrastructure market.
The deal will be completed in H1 2012. Broadcom expects to have accumulated $4.2bn cash by the end of this month.
The deal is the second big semiconductor takeover this year. In April TI bought National for $6.5bn.
