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Lattice to Buy Agere's Flexible Field Chip Arm

In a move to become slimmer, focus on system-level integration and pick up some cash in one, fell swoop, communications chipmaker Agere Systems Monday agreed to sell its field programmable gate array (FPGA) business to Lattice Semiconductor Corp. for $250 million in cash.

Allentown, Pa.'s Agere will sell to Hillsboro, Ore.'s Lattice its ORCA FPGA product portfolio and related software design tools. Designed for use in routers and switches, FPGAs are integrated circuits that can be programmed in the field after manufacture to help computer users better meet their processing needs. Chief among the offering are Agere's field programmable system chips (FPSCs), which combine generic FPGA logic with embedded cores dedicated to the implementation of advanced communication protocols and high-speed input/output (I/O) functions.

In keeping with true FPGA tradition, Agere said its ICs give system providers a "clean slate" to create custom circuitry at their own development and manufacturing sites, while circuitry for typical "standard-cell" ICs needs to be designed before the chips are manufactured. Forged by Agere in 1998, FPSCs are a marriage of FPGA and "standard-cell" ICs to allow system designers higher component density and performance for those parts of their circuitry that are unlikely to change, while retaining the advantages of programmability for faster development.

Sohail Khan, executive vice president of Agere's Infrastructure Systems Group, said the move was part of Agere's strategy to better position our business for long-term profitable growth."

"While FPGAs have been a strong business for us, we are redirecting our resources to areas where we can focus our skills on system-level integration for advanced communications applications," Khan said. "The business is a strong strategic fit with Lattice and we look forward to working with them to ensure a smooth transition for our customers."

Roughly 100 Agere product development, marketing and technical sales employees will join Lattice as a result of the deal. Lattice will also receive some intellectual property cores and patents from Agere. Despite dumping the division, Agere isn't giving up on FPGAs; as part of a cross-licensing pact, Agere will continue to have access to the ORCA FPGA technology for incorporation into its "system-on-a-chip" integrated circuits, while Lattice will receive rights to Agere patents and certain intellectual property for use in current and future FPGA and FPSC products.

Agere and Lattice feel the deal will be iced by the first calendar quarter of 2002.

In other semiconductor industry shrinking news, Pixelworks Inc. picked up nDSP Corp. for about $21 million in stock. Pixelworks will use nDSP's products to add video processing ICs and technology to enhance the image quality of televisions.

But Monday's semiconductor deals pale in comparison to the one inked last week by Synopsys Inc., which moved to buy Avant! Corp. for almost $780 million in stock.

Consolidation, it seems, is occurring in just about every tech market, as telecommunications service provider Verizon Monday agreed to sell its transaction-based call processing and network services unit to GTCR Golden Rauner LLC for roughly $800 million.