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Broadcom pounces on Gigle to break into HomePlug AV and G.hn

In a deal that we predicted well over a year ago, Broadcom has acquired Gigle networks, a home networking chip designer which is focused on the powerl

By PETER WHITE

Published: 25 November, 2010

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In a deal that we predicted well over a year ago, Broadcom has acquired Gigle networks, a home networking chip designer which is focused on the powerline and G.hn “no new wires” home networking markets. The deal involves an initial $75 million plus the potential for a further $8 million in performance related payments.

This jumps Broadcom into the G.hn and Homeplug AV game, directly up against Sigma’s Coppergate, which launched a MIMO version of HomePlug and the first G.hn chips last month, and Atheros which acquired Intellon last September, the chip business which drove the first generation of HomePlug devices, as well as DS2, the Spanish chip designer which was snapped up by Marvell a year ago.

Both DS2 and this Gigle deal must be thought of as “distressed” sales, with DS2 sold from bankruptcy and Gigle going for little more than 2.5 times the $31 million of VC funds which were publicly invested in it by VC firms. The chances are that Gigle also had some debt funding that would not have been publicly announced and there was very little profit on the deal for the VCs behind it.

But for Broadcom it brings an unfinished G.hn position which probably needs just a little cash to bring to market, and an established HomePlug and HomePlug AV product line. Gigle also offers a number of home networking switches which work across all forms of physical wire and through powerlines, and its own proprietary Mediaxstream technology which is a wideband superset of them all. Broadcom will almost certainly wish to produce a hybrid chip between WiFi and HomePlug to cover the moves announced by Atheros, but it is known to have had several false starts in home networking and has perhaps lost its way.

We had reports at IBC that a year-long effort to build a MoCA chip had failed and that something similar had been going on for even longer with a set top chip for Microsoft Mediaroom IPTV set tops. Gigle will provide a fresh understanding of these markets for a company known for its massive reach in WiFi and its habit of arriving late into chip markets and commoditizing them.

The home networking business is certainly in need of Broadcom’s scale and ambition.

Gigle is culturally very different from Broadcom and it will be a challenge to keep the company’s clear start-up spirit. The company has a motto of being “just mad enough” to imagine it can create a brand new technology whereas in fact it was “just sane enough to get acquired.”

Gigle had built a set of engineers in Barcelona, Spain and Edinburgh, Scotland, and only had sales people in its Redwood City, California offices.

But Broadcom has been on an acquisition spree of late, spending $316 million to acquire base station chip maker Beceem (mostly for WiMAX base stations) and laid out $86 million to buy Percello, a femtocell SoC builder.

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