Capitalizing on the craze for cell phones, National
Semiconductor today agreed to pay $21.5 million to acquire Algorex, which
specializes in designing digital signal processors.
Digital signal processors, or DSPs, essentially translate sound waves into
signals than can be carried across digital networks, and vice versa. Demand
for these processors, which serve as a nerve center for cell phones, has
dramatically boosted revenues and profits for a number of companies,
especially Texas Instruments.
Santa Clara, Calif.-based National will integrate Algorex's technology
into its existing line of DSP processors, a representative said. Algorex largely has made its reputation for software, algorithms and chip designs for DSPs incorporated into wireless consumer devices such as digital cordless phones and wireless phones.
Enhancing its DSP focus fits into the company's overall strategy of moving
away from PC silicon into making a greater variety of chips. Historically,
National specialized in analog chips, processors which take sound, heat
and light waves and turn them into digital data that can be interpreted by
In 1997, National and Cyrix decided to take on Intel in the market for
PC processors. Price cutting and product delays, however, lead to massive
Earlier this year, National sold Cyrix to Taiwan's Via Technologies to
concentrate on other silicon components. Last week, the company surprised
Wall Street by reporting higher-than-expected earnings of $70.4 million,
excluding one-time after tax gains, for the second fiscal quarter ending
Nov. 28. The profit followed six consecutive quarterly losses
"National envisions a world where personal and business information is
accessible anywhere, anytime through a plethora of user-friendly
information appliances," National CEO Brian Halla said in a statement. "With this
acquisition, National now has all the advanced wireless technologies in
place t to enable our customers to execute on this vision."
Algorex is based in San Francisco.