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EXHIBIT 99.1
NEWS RELEASE
BROADCOM BUSINESS MEDIA CONTACTS BROADCOM FINANCIAL ANALYST CONTACT
Bill Blanning or Eileen Algaze William J. Ruehle
Corporate Communications Department Vice President and Chief Financial Officer
949-450-8700 949-450-8700
[email protected] [email protected]
[email protected]
BROADCOM TRADE MEDIA CONTACT NewPort Communications Contact
Laura Brandlin Joseph Vithayathil
Director, Marketing Communications Vice President of Marketing and Sales
949-450-8700 949-450-1080
[email protected] [email protected]
BROADCOM TO ACQUIRE NEWPORT COMMUNICATIONS,
TARGETING THE HIGHEST GROWTH SEGMENTS OF THE OPTICAL COMMUNICATIONS MARKET
Acquisition Adds OC-48 and OC-192 SONET Transceivers, Framers, Serial 10 Gbps
Ethernet and the World's Highest Speed SerDes Technology for the Optical
Communications Market
IRVINE, Calif. - August 14, 2000 - Broadcom Corporation (Nasdaq: BRCM), the
leading provider of integrated circuits enabling high speed broadband
communications, today announced that it has signed a definitive agreement to
acquire NewPort Communications, Inc., a privately held company based in Irvine,
California. NewPort Communications develops high-performance optical
communications chips, which enable the rapid build out and bandwidth expansion
of the fiber-optic infrastructure necessary to support the explosive growth of
the Internet.
The acquisition is a key step in advancing Broadcom's strategic initiative to
provide end-to-end IC solutions that increase the performance, intelligence and
cost-effectiveness of broadband communication networks worldwide. This merger
will provide Broadcom with the broadest offering of CMOS optical communications
technologies for the next generation of Synchronous Optical Network/Synchronous
Digital Hierarchy (SONET/SDH) and 10-Gigabit Ethernet networks. Specifically,
Broadcom will be able to offer optical communications OEMs and laser module
suppliers with a broad portfolio of optical and Wide Area Network (WAN)
infrastructure products, including transceivers, framers, communications
processors and high-speed serial interface devices.
NewPort Communications has achieved design wins and strategic relationships with
a number of the top-tier optical infrastructure suppliers. Cisco, Lucent, and
Sumitomo are strategic investors
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in NewPort Communcations and are presently among its largest customers. Other
top-tier customers include Alcatel, Ciena, and JDS Uniphase.
NewPort has achieved major industry milestones by introducing the world's first
single-chip 2.5 Gigabit-per-second (Gbps) OC-48 transceiver in July 1999 and the
world's first 10 Gbps CMOS OC-192 transceiver solution in May 2000. These
devices offer substantially higher levels of integration and lower power than
competitive Gallium Arsenide, Bipolar or Silicon Germanium solutions. The unique
implementation of these ultra-high speed transceivers in standard CMOS process
results in the lowest power and cost-per-port, thereby enabling higher port
density systems, such as Dense Wavelength Division Multiplexing (DWDM), and
integration of the transceiver into the laser module, as well as higher levels
of silicon integration of the transceiver with large ASICs, such as framers,
intelligent routers, and packet processors.
NewPort's highly integrated and low power system-on-a-chip solutions are ideal
for high port count communications systems, such as DWDM transport equipment.
NewPort's products allow the economic scaling of the future DWDM equipment by
reducing the power consumption and footprint required for each port, resulting
in an increase in port density.
Broadcom announced the world's first single-chip 10-Gigabit Ethernet Coarse
Wavelength Division Multiplexing (CWDM) CMOS transceiver in May 2000, and is
currently developing Serializer/Deserializer (SERDES) technology to speed up the
backplanes of next-generation Local Area Network (LAN) and WAN systems. The
addition of NewPort's products complements Broadcom's product portfolio and
enables Broadcom to offer complete end-to-end solutions for both the LAN and the
WAN.
The explosive growth in Internet traffic demands a 10X increase in network
bandwidth every two years. As a result, the trunk capacities of Internet
backbone equipment will increase from two channels of OC-48 (2.5Gbps) today to
more than 80 channels of OC-192 (10Gbps) in 2003. In metropolitan networks, the
trend is strongly toward 10-Gigabit Ethernet. According to the Dell'Oro Group,
10-Gigabit Ethernet remains at the forefront of integration between the LAN,
Metropolitan Area Network (MAN) and WAN. The NewPort acquisition further
reinforces Broadcom's capability to capitalize upon the upcoming convergence of
the LAN and WAN infrastructure, and the accelerated port shipment growth
associated with it. The Gartner Group forecasts the total available market for
WAN optical networking chips to grow to over $1.3 billion in 2001.
"Today's announcement reinforces Broadcom's strategic initiative to provide
end-to-end solutions across the LAN and WAN," said Dr. Henry T. Nicholas III,
President and CEO of Broadcom. "The acquisition of NewPort Communications and
its SONET/SDH expertise is not only synergistic with our 10-Gigabit Ethernet
technology but is also complementary to the communications processor technology
that we are acquiring through our merger with Silicon Spice Inc., announced on
August 7. Together these acquisitions will provide Broadcom with a powerful
platform to address the rapidly growing wide area networking marketplace."
"The combined capabilities and resources of NewPort and Broadcom will bring the
most complete system solutions to the optical communications marketplace," said
Dr. Armond Hairapetian, President and CEO of NewPort Communications. "Broadcom's
market presence and proven ability to deliver innovative, cost-effective silicon
solutions and NewPort's
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complementary intellectual property and talented engineering pool together
promise to speed up the timetable for delivering complete solutions for MAN and
WAN networks."
In connection with the acquisition, Broadcom will issue in aggregate about 5.5
million shares of its Class A Common Stock in exchange for all outstanding
shares of NewPort's Preferred and Common Stock and upon exercise of outstanding
employee stock options, warrants and other rights of NewPort. The merger
transaction is expected to close within 60 days and will be accounted for under
the purchase method of accounting. The boards of directors of both companies
have approved the merger, which awaits approval by NewPort's shareholders and
the satisfaction of regulatory requirements and other customary closing
conditions. Broadcom expects to record a one-time write-off for purchased
in-process research and development expenses related to the acquisition in its
third fiscal quarter (ending September 30).
ABOUT NEWPORT COMMUNICATIONS
NewPort Communications, Inc., founded by Dr. Armond Hairapetian and Lorenzo
Longo in 1996, supplies mixed-signal integrated circuits for the high-speed
communications market. The Company's business objective is to develop highly
integrated single-chip solutions that enable economic scaling of the existing
bandwidth capacity of today's fiber-based networks. For more information, visit
www.newportcom.com.
ABOUT BROADCOM
Broadcom Corporation is the leading provider of highly integrated silicon
solutions that enable broadband digital transmission of voice, video, and data.
Using proprietary technologies and advanced design methodologies, the company
designs, develops and supplies integrated circuits for a number of the most
significant broadband communications markets, including the markets for cable
set-top boxes, cable modems, high-speed office networks, home networking, Voice
over Internet Protocol (VoIP), residential broadband gateways, direct broadcast
satellite and terrestrial digital broadcast, optical networking, digital
subscriber lines (xDSL) and wireless communications. Broadcom is headquartered
in Irvine, Calif., and may be contacted at 949-450-8700 or at www.broadcom.com.
SAFE HARBOR STATEMENT OF BROADCOM CORPORATION UNDER THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995:
This release may contain forward-looking statements based on our current
expectations, estimates and projections about our industry, management's
beliefs, and certain assumptions made by us. Words such as "anticipates,"
"expects," "intends," "plans," "believes," "seeks," "estimates," "may," "will"
and variations of these words or similar expressions are intended to identify
forward-looking statements. In addition, any statements that refer to
expectations, projections or other characterizations of future events or
circumstances, including any underlying assumptions, are forward-looking
statements. These statements are not guarantees of future performance and are
subject to certain risks, uncertainties and assumptions that are difficult to
predict. Therefore, our actual results could differ materially and adversely
from those expressed in any forward-looking statements as a result of various
factors.
Important factors that may cause such a difference for Broadcom in connection
with the acquisition of NewPort Communications include, but are not limited to,
the risks inherent in
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acquisitions of technologies and businesses, including the timing and successful
completion of technology and product development through volume production,
integration issues, costs and unanticipated expenditures, changing relationships
with customers, suppliers and strategic partners, potential contractual,
intellectual property or employment issues, accounting treatment and charges,
and the risks that the acquisition cannot be completed successfully or that
anticipated benefits are not realized; the rate at which present and future
customers and end-users adopt Broadcom's and NewPort Communications'
technologies and products in the markets for optical communications integrated
circuits; delays in the adoption and acceptance of industry standards in the
foregoing markets; the timing of customer-industry qualification and
certification of our products and the risks of non-qualification or
non-certification; the timing, rescheduling or cancellation of significant
customer orders; the loss of a key customer; the volume of our product sales and
pricing concessions on volume sales; silicon wafer pricing and the availability
of foundry and assembly capacity and raw materials; the qualification,
availability and pricing of competing products and technologies and the
resulting effects on sales and pricing of our products; intellectual property
disputes and customer indemnification claims; fluctuations in the manufacturing
yields of our third party semiconductor foundries and other problems or delays
in the fabrication, assembly, testing or delivery of our products; our ability
to specify, develop or acquire, complete, introduce, market and transition to
volume production new products and technologies in a timely manner; the effects
of new and emerging technologies; the effectiveness of our product cost
reduction efforts; the risks of producing products with new suppliers and at new
fabrication and assembly facilities; problems or delays that we may face in
shifting our products to smaller geometry process technologies and in achieving
higher levels of design integration; the risks and uncertainties associated with
our international operations; our ability to retain and hire key executives,
technical personnel and other employees in the numbers, with the capabilities,
and at the compensation levels needed to implement our business and product
plans; changes in our product or customer mix; the quality of our products and
any remediation costs; the effects of natural disasters and other events beyond
our control; the level of orders received that can be shipped in a fiscal
quarter; potential business disruptions, claims, expenses and other difficulties
resulting from residual "Year 2000" problems in computer-based systems used by
us, our suppliers or our customers; general economic conditions and specific
conditions in the markets we address; and other factors.
Our Annual Report on Form 10-K, recent and forthcoming Quarterly Reports on Form
10-Q, recent Current Reports on Forms 8-K and 8-K/A, and other Securities and
Exchange Commission filings discuss some of the important risk factors that may
affect our business, results of operations and financial condition. We undertake
no obligation to revise or update publicly any forward-looking statements for
any reason.
Broadcom(R) and the pulse logo are trademarks of Broadcom Corporation and/or its
subsidiaries in the United States and certain other countries. NewPort
Communications is a trademark of NewPort Communications, Inc. in the United
States and certain other countries. All other trademarks mentioned are the
property of their respective owners.
