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Silicon Image to Buy TransWarp Networks

Semiconductor maker Silicon Image Monday said it has inked a deal to acquire TransWarp Networks, a privately held company focused on switching, CPU and memory products.

The Sunnyvale, Calif.-based company designs and sells a variety of integrated circuits, including digital video controllers, receivers, transmitters, and processors that are built into computers, set-top boxes, and DVD players. Its chips also are found in video systems such as flat-panel displays and CRTs , as well as some storage networking devices.

But the fabless company said it wants to broaden its storage offerings from PC to enterprise markets and "build more integrated and innovative storage management products."

Under the terms of the deal, Silicon Image said it will issue about 2.4 million common shares, as well as options to buy 700,0000 of its common shares, for all outstanding TransWarp shares and stock options. The transaction is expected to close the first week of April 2003.

"When paired with our high-speed, low-cost Multi-layer Serial Link (MSL) technology, TransWarp's switch, CPU and memory design expertise will allow us to create the components required by our innovative new storage architecture, which builds upon our early success in Serial ATA and enables storage solutions with an unrivaled price/performance mix," Silicon Image President Steve Tirado said in a statement.

TransWarp Networks President and Chief Executive Officer Edward Pak will join Silicon Image in the newly created position of vice president of storage products. Pak will have responsibility for product and business strategy for the storage line of business, including engineering, product and technical marketing, and operations for storage products.

The company said the moves allow it to focus on three vertical markets: Consumer Electronics, Digital PC/Display, and Storage.

Silicon Image vice president of marketing, Parviz Khodi will lead the company's Digital PC/Display division. It's existing consumer electronics lineup will be headed by John LeMoncheck.