The 18-month-old Innovent this month disclosed to CNET News.com its roadmap of processors in preparation for the Bluetooth conference this week in Monte Carlo, Monaco. Bluetooth is an emerging standard that allows devices such as handheld computers and cell phones to share data wirelessly.
Broadcom already had a 13 percent stake in El Segundo, Calif.-based Innovent and said it will issue approximately 3 million shares to complete the deal, which should close in 60 days. Irvine, Calif.-based Broadcom has been on an acquisition tear, acquiring 10 companies since 1999.
"We've been working with Innovent since its inception," Broadcom chief executive Henry Nicholas said in an interview. "This is the Broadcom of wireless. It only makes sense that the Broadcom of wireless should merge with Broadcom."
Nicholas said the deal will allow Broadcom to add wireless home networking to cable modems, set-top boxes and other consumer devices that use Broadcom chips. Eventually, Broadcom plans to integrate the Bluetooth function on the same piece of silicon as the set-top box or cable modem processor.
Two weeks ago, Broadcom snapped up Pivotal Technologies, a maker of digital video interface chips that was also working in the Bluetooth area. Broadcom co-chairman Henry Samueli told Bridge News last month that the company plans to continue aggressively acquiring companies as it looks to double its work force in 2000.
The potentially huge market for Bluetooth chips has attracted a wide range of entrants, including large
Cahners In-Stat analyst Joyce Putscher said recently the Bluetooth chip market should be $1 billion by 2001 and several times that within a few years. The Bluetooth standard, backed by heavyweights including Intel and Ericsson, is named for Harald Bluetooth, the Danish king who unified Denmark and Norway in the 10th century.
Innovent, started by engineers Reza and Maryam Rofougaran, touts the fact its chips use a standard chip-making process rather than one of the more costly and exotic processes typically used for radio frequency chips, as well as a self-calibration feature that helps improve the manufacturing yields by allowing the chips to adjust themselves for subtle differences along the production lines.
"We've been targeting costs from the get-go," said William Colleran, a former TRW engineer and Merrill Lynch investment banker who joined Innovent as chief executive in March of last year. "That's why we think (standard CMOS manufacturing) is the answer."
Nicholas declined to identify what other areas might be on Broadcom's radar screen for acquisitions, but noted that the company is already addressing a huge portion of tomorrow's chip market.
"Without expanding into any new markets, the markets we are in today could grow to be a larger semiconductor market than PCs," Nicholas said. "We're on a pace to be the fastest-growing semiconductor company of all time."
Already this year, Broadcom has acquired BlueSteel Networks, a maker of network security processors, and Digital Furnace, a maker of software that boosts the capacity of existing networks to allow more interactive services. In March, the chipmaker announced its acquisition of 3D graphics firm Stellar Semiconductor.
Last year, Broadcom acquired five businesses: HotHaus, AltoCom, Maverick Networks, Epigram and Armedia.