Broadcom Expands 4G Goals with NetLogic Acquisition

Broadcom Corp., a leader in semiconductor solutions for wired and wireless communications, announced today that it has agreed to buy NetLogic Microsystems Inc., a provider of intelligent semiconductor solutions that are powering next-generation Internet networks, for $50 per share, or $3.7 billion.

NetLogic makes chips for 4G wireless networks, a technology still in its developing stage but already the focus of communication-chip companies.   The deal will expand Broadcom’s infrastructure portfolio with a number of new product lines and technologies, including knowledge-based processors, multi-core embedded processors and digital front-end processors.  Board members from both companies approved the agreement which will take effect early next year.

“The premium is fair,” Broadcom Chief Executive Officer Scott McGregor said in an interview. “This acquisition expands our market into additional networking opportunities.”

According to Bloomberg, NetLogic shares rose as much as 54 percent to $49 in early trading after closing at $31.91 on the NASDAQ stock market Sept. 9.  It had gained 1.6 percent this year before today.  Broadcom, based in Irvine, California, fell 88 cents to $33.44 on Sept. 9 and has fallen 23 percent in 2011.

Last week, NetLogic started revenue shipments of their XLP multi-core processors into the communications control plane market.  The new product added a new market for NetLogic Microsystems’ XLP family of multi-core processors.  Previous generations of XLR and XLS families of processors were primarily targeted at the data plane processing market.

Aside from extending their reach in 4G wireless networks, Broadcom has recently partnered with Ubitus Inc., a leading cloud computing company.  Ubitus extends their GameCloud platform that seamlessly stream HD quality gaming with minimum bandwidth requirements, transforming a TV into a game console to Broadcom’s set-top box (STB) product family which features high performance CPU for accelerated game control performance and fast response times, low latency decode architecture and innovative network offload engines that reduce game play latency and jitter and an advanced audio system to maintain A/V sync even under adverse network conditions.

“The enablement of Ubitus GameCloud platform on a STB allows the capability to deliver any type of gaming experience on TV, including 3D intensive first-person shooting games, social games, and online games,” said Wesley Kuo, CEO of Ubitus.

“This is great news to the operators because now premium game content can be available in the living room via a set-top box. Home users can play games on TV sets, tablets, smartphones, and PCs through Ubitus cloud gaming service from the same service provider.”

About Mellisa Tolentino

Mellisa is a staff writer for SiliconAngle, covering social and mobile news. She is fascinated by technology and loves imparting what she learns through her journey as a writer. Got a news story or tip? Send it to mellisa@siliconangle.com