Indian chip R&D center gets $20m more

NEW DELHI: Conexant Systems Inc, a fabless semiconductor system solutions company along with GlobespanVirata Inc, another US-based systems software company, plan to invest up to $20 million in the Indian R&D center by 2005.

Talking about the company’s plans for India GlobespanVirata India President, Vivek Bansal said that the expansion plan includes growth through aggressive hiring and mergers and acquisitions. "The $15-20 million India investment over the next 18-24 months is aimed at creating a world class team of 500 product development engineers and system architects with complete product development capabilities," he said.

The increased investment would also help the company in scaling up to VLSI, DSP and systems software development besides expanding its technology expertise in MPEG-A and V, DTV, voice, video, audio, codec, Bluetooth among others. It, however, does not include the acquisition plans.

According to Bansal, the company is actively pursuing acquisition of smaller Indian companies with 25-100 engineers specializing in communication IC space. Declining to disclose any time frame or the name of the companies being considered, Bansal said that inorganic growth had always been GlobespanVirata’s game plan–the company made 12 acquisitions during last 12 months.

The investment decision follows a definitive merger agreement signed by GlobespanVirata and Conexant on November 3, 2003 that is expected to create one of the largest semiconductor companies in the broadband digital home space with an annual revenue run-rate of $1.2 billion and a combined market capitalization of $2.8 billion. The companies expect to complete the merger process, which is subject to customary closing conditions, including shareholder and regulatory approvals by February-March 2004.

Talking about the need for the merger Bansal said, "combining GlobespanVirata with Conexant will allows us to complement our broadband communications with broadband media processing, including broadcast video encoders and decoders as well as digital set-top box system solutions for cable, satellite, terrestrial data and digital video networks."

(CNS)