STMicro acquires Tioga's DSL chip technology, obtains option to buy IP house

STMicro acquires Tioga's DSL chip technology, obtains option to buy IP house
By Semiconductor Business News
February 18, 2002 (8:09 a.m. EST)
URL: http://www.eetimes.com/story/OEG20020214S0032

GENEVA -- In a move to expand its broadband-chip business, STMicroelectronics Inc. today announced it has acquired the DSL chip and intellectual-property (IP) technology from Tioga Technologies Ltd. for $10 million.

The deal calls for ST to acquire Tioga's current and future DSL products. In addition, ST was granted an option to purchase the shares or assets of Tioga before Jan. 15, 2003, for an additional $12 million. Tioga must reach certain milestones before ST purchases its shares or assets, according to the companies.

Tioga is a San Jose-based IP house that was spun out of Tel Aviv-based Orckit Communications Ltd. in June 2000. In the past year, Tioga switched its business model from standard DSL chip products to IP royalties.

The deal with Tioga expands ST's DSL chip efforts, but it also raises questions about the company's relationship with Alcatel SA. ST sells ADSL chips based on Alcatel's technology and serves as a foundry for the Paris-based company.

But under the terms with Tioga, ST has acquired the rights to Tioga's ADSL chip set line for central-office applications. ST already offers a broad range of ADSL products, primarily for consumer-oriented, customer-premise equipment.

In addition, ST will also introduce new DSL chip sets, based on Tioga's SHDSL (symmetric high-bit-rate DSL) technology. SHDSL is a business-oriented technology that supports symmetric data rates ranging from 192-kilobits-per-second to 2.32-megabits-per-second.

ST has also been developing chip sets for VDSL applications. "Through this agreement, ST enhances its broad product line in the area of xDSL," said Pietro Palella, general manager of ST's Wireline Division.

"By combining ST's existing ADSL product line with the Tioga products, we can deliver chip sets that can provide breakthrough improvements in integration, board space, and power savings for network equipment manufacturers to our customers," he said.