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EXHIBIT 99.2
Conexant Editorial contact: Conexant Investor Relations Contact:
Scott Allen Thomas Schiller
Conexant Systems, Inc. Conexant Systems, Inc.
949-483-6849 949-483-CNXT (2698)
[email protected] [email protected]
CONEXANT TO ACCELERATE DEVELOPMENT OF HIGH-SPEED OPTICAL NETWORKING PRODUCTS
WITH ACQUISITION OF NOVANET
Acquisition Will Speed Development of High-Speed Physical-Layer Solutions
for Optical Networks Powering the Internet Infrastructure
Newport Beach, Calif., July 19, 2000 - Conexant Systems, Inc. (NASDAQ: CNXT),
announced today that it has agreed to acquire privately held Novanet
Semiconductor, a fabless designer of high-speed physical layer networking
solutions located in Ra'anana, Israel, near Tel Aviv. The stock transaction will
enable Conexant to speed the development of high-speed devices in its
optical-networking portfolio, particularly OC-48 (2.4 Gbps) solutions that
support the worldwide synchronous optical network (SONET) and synchronous
digital hierarchy (SDH) standards.
The Novanet acquisition is one of two that Conexant is announcing today for its
Network Access Division. The company also announced it is acquiring NetPlane
Systems of Dedham, Mass. (see accompanying news release).
SONET is the key underpinning of metropolitan and long-distance optical
networks, the majority of which are migrating to OC-48 data rates. Novanet
develops SONET/SDH-compatible physical layer interface devices such as framers,
mappers and multiplexers with embedded clock and data recovery (CDR) units.
These products are manufactured with the widely used and power-efficient
complementary metal oxide semiconductor (CMOS) process. Novanet's team of
experienced SONET design specialists is developing integrated, multichannel
solutions that will include each of these functions in single highly integrated
chips at various SONET speeds. Framing and multiplexing devices perform all of
the tasks associated with organizing and identifying data packets that are
transported over the physical medium within the high-speed optical core of the
rapidly expanding Internet infrastructure.
"Novanet brings to Conexant a team of mixed-signal and digital VLSI designers
that will significantly accelerate our development of OC-48 framing,
multiplexing and transceiver solutions," said Raouf Halim, senior vice president
and general manager for Conexant's Network Access Division. "This addition also
complements our recent acquisition of HotRail Inc., which specializes in
high-speed switch fabric and backplane channel technology, and our earlier
acquisitions of Microcosm, an optical transceiver supplier, and Maker
Communications, a leading provider of network processors and software. With
these acquisitions, Conexant will be the first vendor capable of providing a
complete fiber-to-switch silicon solution for packet and cell processing
equipment such as Internet Protocol (IP) routers, asynchronous transfer mode
(ATM) switches, and the new generation of metropolitan, multiservice optical
network elements."
Novanet is scheduled to release an OC-48 framer with integrated CDR during the
first calendar quarter of 2001. Novanet is also currently sampling a quad OC-3
integrated framer/CDR device, which, in addition to upcoming solutions for
OC-48, OC-192 (10 Gbps) and beyond, will strengthen Conexant's OptiPHY framing
and multiplexing portfolio. These solutions perform critical tasks related to
combining low-speed circuits into higher-speed circuits. The OptiPHY product
family allows carriers to transport significantly higher volumes of data traffic
using the SONET transmission standard, which translates into the ability to
handle higher volumes of ever-increasing Internet traffic.
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"We are pleased to be joining the Conexant team," said Elkana Ben-Sinai, chief
operating officer of Novanet. "Our engineers will help Conexant accelerate the
development of one of the most complete offerings for multi-terabit routers, ATM
and IP switches, gigabit Ethernet switches and optical networking equipment."
Novanet will become part of Conexant's Network Access Division. Elkana Ben-Sinai
will manage the new Conexant entity and report directly to Raouf Halim. All of
Novanet's employees are expected to remain with the company, operating from
Novanet's existing facility near Tel Aviv, which houses a fully equipped ISO
9001 certified development center. Novanet enhances Conexant's substantial
presence in Israel, where the Network Access Division already maintains a design
center located in Herzelia.
Conexant will acquire Novanet in a stock transaction for 2.4 million shares of
Conexant stock. At Conexant's closing stock price yesterday, the transaction is
valued at approximately $120 million, plus certain payments up to $35 million
dollars subject to meeting future performance targets. The transaction has been
approved by the boards of directors of both companies and is scheduled to close
within 45 days, subject to obtaining a tax ruling in Israel and to customary
closing conditions.
Safe Harbor Statement
This press release contains statements relating to future results of the company
(including certain projections and business trends) that are "forward-looking
statements" as defined in the Private Securities Litigation Reform Act of 1995.
Actual results may differ materially from those projected as a result of certain
risks and uncertainties. These risks and uncertainties include, but are not
limited to: risks that the contemplated transaction might not occur in a timely
manner or at all; risks relating to the integration of the technologies,
personnel and businesses of the company and Novanet; global and market
conditions, including, but not limited to, the cyclical nature of the
semiconductor industry and the markets addressed by the company's and its
customers' products; demand for and market acceptance of new and existing
products; successful development of new products; the timing of new product
introductions; the availability and extent of utilization of manufacturing
capacity; pricing pressures and other competitive factors; changes in product
mix; fluctuations in manufacturing yields; product obsolescence; the ability to
develop and implement new technologies and to obtain protection for the related
intellectual property; the successful implementation of the company's
diversification strategy; labor relations of the company, its customers and
suppliers; and the uncertainties of litigation, as well as other risks and
uncertainties, including but not limited to those detailed from time to time in
the company's Securities and Exchange Commission filings. These forward-looking
statements are made only as of the date hereof, and the company undertakes no
obligation to update or revise the forward-looking statements, whether as a
result of new information, future events or otherwise. Other brands and names
contained in this release are the property of their respective owners.
About Conexant Systems, Inc.
With a revenue run-rate of approximately $2 billion per year, Conexant is the
world's largest independent company focused exclusively on providing
semiconductor solutions for communications electronics. With more than 30 years
of experience in developing communications technology, the company draws upon
its expertise in mixed-signal processing to deliver integrated systems and
semiconductor products for a broad range of communications applications. These
products facilitate communications worldwide through wireline voice and data
communications networks, cordless and cellular wireless telephony systems,
personal imaging devices and equipment, and emerging cable and wireless
broadband communications networks. The company aligns its business into five
product platforms: Network Access, Wireless Communications, Digital
Infotainment, Personal Imaging, and Personal Computing. Conexant is a member of
the S&P 500 and Nasdaq-100 Indices. For more information, visit Conexant at
www.conexant.com.
About Novanet
Founded in 1998, Novanet Semiconductor is a fabless innovator of high-speed
physical layer (PHY) solutions for the Internet infrastructure and
telecommunications markets. These high-speed, multi-port digital integrated
circuits (IC) supply adaptive PHY solutions that are critical connecting links
in a broad range of networking applications. Novanet ICs are based on digital
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CMOS technology. Novanet's corporate headquarters, located in Ra'anana, Israel,
houses a fully equipped ISO 9001 certified development center.
Definition of Technical Terms
Asynchronous Transfer Mode (ATM) - High-speed networking technology that allows
transport of fixed-length cells without allocating physical channels for
specific connections. ATM supports simultaneous transfer of voice, data and
video traffic, and works in both LAN and WAN environments.
Backplane channel - A wiring board, usually constructed as a printed circuit,
used in microcomputers and communications equipment to provide the required
connections between logic, memory and input/output modules.
Complementary Metal Oxide Semiconductor (CMOS) - A process for developing
silicon-based integrated circuits (IC) that are low cost and require less power.
Ethernet - Ethernet is one of the most widely-implemented LAN standards, and it
supports data-transfer rates of 10 Mbps. A newer version of Ethernet, called
100Base-T (or Fast Ethernet), supports data-transfer rates of 100 Mbps. The
newest version, gigabit Ethernet, supports data rates of 1 gigabit (1,000
megabits) per second.
Frame - A frame is a unit of data transmission in a network, and can also be
described as a datalink layer "packet" which contains the header and trailer
information required by the physical medium for synchronization and error
control.
Gigabit - One billion bits.
Internet Protocol (IP) - The most important standard of the Transmission Control
Protocol/Internet Protocol (TCP/IP) suite on which the Internet is built. TCP/IP
is the language governing communications between all computers on the Internet,
and provides the set of instructions that dictates how packets of information
are sent across multiple networks.
Line interface - The line is the physical medium that completes a circuit path,
identified typically by connector, slot and media type. The interface is a
data-link/physical-layer connection to this physical network transmission
medium.
Multiplexing - Multiplexing refers to combining, in a predefined standard way,
low-speed circuits into higher-speed circuits both in the PDH and SONET/SDH
hierarchies. For example in SONET, three STS-1s are multiplexed into a STS-3,
and in PDH, 24 DS0s are multiplexed into a DS1.
Network processors - Flexible, highly-integrated, scalable and programmable
processors that make it possible to add new functions to a switch, router or
other core network equipment at virtually any time through software, rather than
hardware, modifications.
Plesiochronous Digital Hierarchy (PDH) - The standard used for transmitting data
on American T-carrier and European E-carrier systems. The building blocks in the
American PDH hierarchy are DS0 (56 Kbps), DS1 (1.544 Mbps), and DS3 (44.736
Mbps); the European PDH hierarchy consists of 64 Kbps circuits, E1 (2.048 Mbps),
and E3 (34.368 Mbps) blocks. PDH circuits are mostly used to provide local
high-speed access to the network transport infrastructure.
Physical layer - The first of seven layers of the Open Systems Interconnection
(OSI) reference model, which is an architectural model of data communications
protocols that subdivides overall data-communications processes into seven
functional layers: 1) physical, 2) link, 3) network, 4) transport, 5) session,
6) presentation and 7) application. Each layer performs a specific
data-communications task with increasing levels of sophistication. The physical
layer governs hardware connections and byte-stream encoding for transmission.
Router - A system that controls message distribution between multiple-optional
paths in a network. Routers use routing protocols to gain information about the
network, routing metrics and algorithms to select the "best route."
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Synchronous Digital Hierarchy (SDH) - A worldwide standard for transmitting
synchronous data on optical and electrical media. SDH has a few overhead byte
and some multiplexing scheme differences as compared with SONET, but it operates
in the same manner.
Synchronous Optical Network (SONET) - A North American standard for transmitting
synchronous data on optical and electrical media. It is used as a standard for
the backbone and access telecommunications networks transmitting voice and data.
Switch fabric - The internal interconnect architecture used by a switching
device, which redirects the data coming in on one of its ports, out to another
of its ports.
Terabit - One trillion bits.
Transceiver - A transceiver is a combination transmitter/receiver in a single
package.
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