C-Cube to spin off chip group

Silicon Valley high-tech company C-Cube Microsystems is following in the

footsteps of National semiconductor, Hewlett-Packard and 3Com as the Milipitas

company announced its decision to spin off its C-Cube Semiconductor unit as a

new company by the same name. Increasingly high-tech companies are spinning of

business groups that have far greater potential worth as an independent,

publicly traded company than as part of the parent company.

C-Cube, for its part, is merging with Harmonic, a Sunnyvale-based maker of

fiber-optic equipment for cable-television networks. Papers have already been

filed for an initial public stock offering that could generate some $1.2 billion

in proceeds. In the IPO papers filed by C-Cube Microsystems, the company said it

decided to spin off the semiconductor unit "based on current financial

market conditions and the ability of C-Cube Semiconductor to become a viable

public company and create substantial stockholder value.''

C-Cube Semiconductor designs semiconductors, software and systems for digital

video applications. It competes with Sony, NEC and IBM’s Microelectronics

group. C-Cube Semiconductor has annual sales of around $380 million and a profit

of some $50 million. Umesh Padval will become chief executive of C-Cube

Semiconductor where he currently serves as president.