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Broadcom's Got Mobilink's Number

Chipmaker Broadcom Corporation Monday said it has agreed to buy Mobilink Telecom, Inc., in an all-stock deal estimated at $190 million.

Santa Clara, Calif.-based Mobilink supplies chipsets and reference designs for mobile phones, PDAs and cellular modem cards.

As part of the purchase, Irvine, Calif.-based Broadcom is opening up some 5.6 million Class A shares for the acquisition. Company executives expect the deal to close by June 1. Up to 2 million more shares of Broadcom Class A common stock are being reserved for future shareholders and option holders of Mobilink.

"Broadcom's entry into the cellular chip, design and software markets through the acquisition of Mobilink represents an important strategic step for our company, one that will not only allow us to provide wide area roaming capability over the digital cellular networks, but also enhance synergies with our best-in-class products for enterprise 802.11b wireless networks and short range wireless links over Bluetooth connections," said Broadcom president and CEO Dr. Henry T. Nicholas III. "With this acquisition, Broadcom will be unique in its ability to provide products that enable wireless voice, video and data connectivity while in the home, on the road and in the office."

Currently, Mobilink products are in production and being used by major manufacturers of devices designed for the Global System for Mobile Communications (GSM), the world's most prevalent mobile phone standard.

In addition, Mobilink is completing field-testing and certification of its General Packet Radio Service (GPRS) products, targeted to a market that delivers Internet Protocol packet services to over 650 million GSM subscribers. Mobilink's product offering includes an all-CMOS single-chip baseband processor, protocol stacks, and MMI (Man-Machine Interface) and application software.

Broadcom has already introduced a number of products designed for 802.11b and Bluetooth networks. The addition of Mobilink's GSM/GPRS integrated circuits, software and design capabilities will further enable Broadcom to support the convergence of wireless networks, allowing for the delivery of high bandwidth content to users.

"With its broad product portfolio and access to every major broadband communications market, Broadcom is an ideal complement for Mobilink's growing reach into the mobile segment," said Mobilink chairman and CEO Tung Chang. "As mobile handsets transition from pure voice to broadband multimedia and data, the synergies to be derived by combining Mobilink's 2G and 2.5G cellular technologies with Broadcom's 802.11, Bluetooth and DSP products make this a great fit for both companies."