Broadcom said Thursday it plans to buy Athena Semiconductors for $21.6 million, a move that will help arm the company as it sets out to dominate the wireless chip market.
said Thursday it plans to buy Athena Semiconductors for $21.6 million, a move that will help arm the company as it sets out to dominate the wireless chip market.
Broadcom, a communications chip company based in Irvine, California, will pay cash for Athena. Athena designs chips for mobile TV tuners and low-power Wi-Fi, two technologies that would enhance Broadcom’s offerings.
“Mobile television is a very exciting technology,” said Robert Rango, senior vice president and general manager of Broadcom’s mobile and wireless group. “In addition, Athena brings low-power Wi-Fi design capabilities and a seasoned engineering team with a proven track record whose expertise complements Broadcom’s existing engineering resources.”
Buying Athena makes sense for Broadcom, which has quickly built up various lines of wireless products in the past two years through acquisitions and aggressive product development. The chip maker was No. 1 in the Wi-Fi chip market last year. Aside from offering Bluetooth chips, it also creates chips for processing digital information and providing crisp video and audio for cell phones.
Broadcom intends to incorporate Athena’s mobile TV technology to create a chipset for cell phones. Mobile TV—watching television programs and video clips on mobile phones—is considered the next money-making frontier in the cell phone market. Market research firm In-Stat estimates that the mobile TV tuner chip production will reach 81 million units by 2010, more than doubling the current volume.
Mobile TV Obstacles
But obstacles remain for making it a reality for the masses, including questions about content control and distribution and whether consumers would want to watch shows on tiny screens.
Broadcom also plans to turn Athena’s low-power Wi-Fi technology into products for portable devices such as cell phones and handheld video players. Portable media devices require components that don’t guzzle energy because consumers don’t want to have to recharge their gadgets often.
Wi-Fi chips have become common in computers because they allow people to access the Internet wirelessly at home and on the road. But in the past, engineers didn’t focus on making those chips more power-efficient.
Athena was founded in 2001 and has raised $20 million from investors such as Samsung Electronics, Alliance Venture Management, and Needham Capital Partners.
Broadcom expects to close the purchase deal during the fourth quarter, which ends December 31.