SAN DIEGO-Applied Micro Circuits Corp. said it has signed an agreement to acquire a chip unit of IBM Corp. for approximately $227 million.
The deal covers intellectual property and a portfolio of assets associated with IBM’s 400 series of embedded PowerPC standard products, as well as a power architecture license, according to AMCC.
“Long term, the integration of the PowerPC core with our existing network processing portfolio creates compelling future market opportunities, such as communication processors addressing data center, storage and wireless infrastructure solutions,” said Dave Rickey, chairman, president and chief executive officer of AMCC.
IBM said it will continue to supply AMCC with PowerPC products and use them as building blocks for application specific integrated circuits, systems-on-a-chip and other highly customized logic chips.
The company recently acquired 3ware, a storage solutions company.
The acquisition impressed analysts at Morgan Keegan, who reiterated their outperform rating for the company. The deal, according to industry watchers, was intended to boost AMCC’s core business. Cisco Systems Inc. and Nortel Networks Ltd. are some of its main customers.
