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Intel scoops up another communications company

The giant chipmaker agrees to acquire communications software maker Trillium Digital Systems in a cash and stock deal valued at $300 million.

2 min read
Intel today said it has agreed to acquire communications software maker Trillium Digital Systems in a cash and stock deal valued at $300 million.

The acquisition will help bolster Intel's existing Intel Internet Exchange Architecture, or IXA, which is the blueprint for a new family of networking chips. The deal also builds on Intel's aggressive move to become a player in the growing market for chips that power telecommunications equipment.

Los Angeles-based Trillium, a privately held company with 250 employees, provides communications software products that are used in a wide range of equipment, including wireless, Internet, broadband and telephony products. Trillium's software products will become a part of IXA to provide a broader set of products that meets the demands of new networking and telecommunications equipment manufacturers, Intel said.

Intel competes against IBM, Lucent Technologies, Motorola and others to supply chips for the booming communications market. These companies are building a new breed of fast and programmable chips that will power equipment built by networking companies. The new chips will allow service providers to increase Net bandwidth and offer better security and services, such as phone calls over the Net.

Santa Clara, Calif.-based Intel has made numerous acquisitions in this area in the past year in an effort to gain momentum in the growing market. Last November, Intel bought Parity Software Development, a developer of computer telephony software. The company has also made a series of investments in other communications-related companies.

Since Intel's IXA was unveiled last year, the company has introduced a number of new products, including a new version of the IXP1200 Network Processor and new optical networking components for the telecommunications market.

The transaction is valued at approximately $300 million in cash and unregistered Intel common stock, the companies said.

Trillium will become a wholly owned subsidiary that operates within Intel's Network Processing Group. Trillium's 250 employees will become Intel employees once the deal closes. No layoffs are planned, an Intel spokesman said.

The acquisition is subject to regulatory approval.