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EXHIBIT 99.1
NEWS RELEASE
BROADCOM BUSINESS MEDIA CONTACTS BROADCOM FINANCIAL ANALYST CONTACT
Bill Blanning or Eileen Algaze William Ruehle
Corporate Communications Department Vice President and Chief Financial Officer
949-450-8700 949-450-8700
[email protected] [email protected]
[email protected]
ELEMENT 14 CONTACT
Stan Boland
President and CEO
011-44-7768-032773
[email protected]
BROADCOM TO ACQUIRE ELEMENT 14,
LEADING DEVELOPER OF HIGH PORT DENSITY, LOW-POWER DSL CHIPSETS
Advanced System and DSP Architecture Enables Significant Breakthrough in
Integration and Power Reduction
IRVINE, Calif. and CAMBRIDGE, UK - October 4, 2000 - Broadcom Corporation
(Nasdaq: BRCM), the leading provider of integrated circuits enabling broadband
communications, today announced that it has signed a definitive agreement to
acquire Element 14, a leading developer of high-port density, low-power digital
subscriber line (DSL) chipsets, software and communications processor
technology. By adding a full range of DSL expertise to its local, metropolitan
and wide area network, voice, video and home networking capabilities, Broadcom
continues to build its leadership in the delivery of broadband solutions for all
major telephony infrastructure, enterprise and home markets.
Founded in 1999, Element 14 is a privately held, fabless semiconductor company
headquartered in Cambridge, UK, with additional design centers in Bristol, UK,
and Mechelen, Belgium. Element 14 has a team of 68 people focused on DSL system
design, mixed-signal design and DSP design for communications applications. The
company has been granted or has filed applications for 19 patents.
Element 14 is developing what is anticipated to be the industry's first 12-port,
full-rate ADSL solution for the central office (CO). The combination of the
company's advanced algorithms and DSP architecture will enable the lowest power
consumption per channel of any competitive solution.
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The transceiver chipsets in the CO convert high frequency analog signals from
multiple DSL connections into packets and cells and aggregate these for
transmission on high-speed backbones. With Element 14's technology, Broadcom
will enable equipment vendors of DSL access multiplexers (DSLAMs) and digital
loop carriers (DLCs) to offer a significant increase in the number of
DSL-enabled copper twisted-pairs that can be supported within their tight heat,
power and space constraints. Follow-on products are planned for standards-based
symmetric DSL markets
Combined with Broadcom's leadership position and technical expertise in home and
enterprise networking, Element 14's technology will enable feature-rich, highly
integrated ADSL customer premises equipment (CPE) solutions opening the way for
the deployment of cost-effective ADSL residential gateways. Broadcom DSL
residential gateway products will become part of a gateway product portfolio
that already includes Broadcom's recently announced BCM3352, an
industry-leading, single-chip cable modem solution.
"We believe this acquisition will position Broadcom as a leader in the ADSL
market," said Dr. Henry T. Nicholas III, Broadcom's President and CEO. "Together
our combined product lines will offer the most comprehensive portfolio for
copper twisted pair broadband delivery. Broadcom is already the market leader in
VDSL and cable modems, and we are now positioned to provide every means of
delivering broadband access to the home and business. Additionally, Element 14's
world class DSP technology can be leveraged across all our business units."
Dell'Oro Research recently estimated that the total number of combined CO and
CPE DSL ports shipped in 2000 will be 25 million, a five-fold increase compared
with five million in 1999. By 2004, they expect the number of annual DSL port
shipments to grow to 80 million.
"We look forward to combining our ADSL expertise with Broadcom's market-leading
VDSL and home gateway capabilities, a match with powerful synergies," said Stan
Boland, Element 14's President and CEO. "By integrating our DSL transceiver
technology with Broadcom's key strengths in voice processing, network
processing, home networking, wireless and video, we will be uniquely positioned
to build compelling integrated solutions for both ends of the wire. We felt our
technology already gave us leadership in ADSL solutions for the CO but to
develop the next generation of subscriber products, we saw a clear need to have
access to multiple network, protocol, voice and home networking technologies.
Broadcom is clearly the market leader in these areas."
Following the acquisition, Broadcom will establish a new DSL business unit to be
headed by Boland. This new business unit will encompass Broadcom's VDSL and ADSL
businesses, and all related telco local loop transmission activities.
In connection with the acquisition, Broadcom will issue in aggregate about 2.65
million shares of its Class A Common Stock in exchange for all outstanding
shares of Element 14 Preferred and Common Stock and upon exercise of outstanding
employee stock options, warrants and other rights of Element 14. The merger
transaction is expected to close
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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 Element 14's shareholders and the satisfaction of
regulatory requirements and other customary closing conditions. Broadcom expects
to record one-time charges for purchased in-process research and development
expenses, and employer's national insurance contribution expense for UK
employees, related to the acquisition, in its fourth fiscal quarter (ending
December 31).
ABOUT ELEMENT 14
Element 14 designs and sells high performance, low power communications
integrated circuits (ICs) optimized for high-density DSL applications. Element
14's team of 68 people includes some of the most talented and accomplished
silicon designers, software engineers and communications experts from the
semiconductor and telecommunications industries. From facilities in the UK and
Belgium, the world-class design team brings unique competencies to the company
including mixed-signal IC design and implementation, DSL systems design, DSL
applications software and line card reference design, processor architecture,
digital IC definition, verification, system software and tools, processor
microarchitecture and high speed digital IC implementation. In June, Element 14
was recognized by Red Herring magazine as one of its "10 to Watch" companies for
the year 2000. Contact the company at www.element-14.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 local, metropolitan and wide area
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.
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Important factors that may cause such a difference for Broadcom in connection
with the acquisition of Element 14 include, but are not limited to, the risks
inherent in 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 Element 14's technologies
and products in the markets for digital subscriber line products; 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, 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. All other
trademarks mentioned are the property of their respective owners.
