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The years have chipped away at Conexant and now it is gone

Once Conexant strode high and mighty, on the way to becoming a Broadcom class operation in chip designs which spanned DSL encoding, after it bought th

By PETER WHITE

Published: 13 January, 2011

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Once Conexant strode high and mighty, on the way to becoming a Broadcom class operation in chip designs which spanned DSL encoding, after it bought the DSL operations of Globsespan Virata in 2003, as well as video codec acceleration and set tops, DVR chips and chips for cameras and , of course, WiFi.

Conexant suddenly fell the wrong side of the WiFi pricing curve after it had bought Intersil’s WiFi operations, originally one of Cisco’s suppliers and it has been on the back foot ever since, falling out of the WiFi business, and selling off ailing divisions that were suddenly deemed non-core, code for no longer profitable. This week its remnants have been sold to US firm SMSC, a specialist in mixed analog and digital systems, with operations in USB chips, automotive networking, embedded systems and capacitive touch sensing. The sale price was $284 million, including the assumption of Conexant's net debt.

The total cash consideration to be paid is $98 million alongside around 3 million new SMSC shares. What’s left in Conexant are operations in imaging, audio, embedded modems and video and the transaction is expected to close in the first half of 2011.

Conexant’s last two major divestitures over the past two years were its DSL product lines to Ikanos Communications for $54 million in cash and the set top operations to NXP for $110 million in cash up front, and performance related later payments to a further $35 million.

The new merged entity will have a team of over 900 engineers globally, and should lift SMSC’s revenues somewhat from around $632 million which it had for the last 12 months.

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