The business and culture of our digital lives,
from the L.A. Times

Category: Semiconductors

Broadcom agrees to buy NetLogic for $3.7 billion

Broadcom Corp. announced Monday that it agreed to purchase NetLogic Microsystems Inc. for about $3.7 billion.

Irvine-based Broadcom designs and supplies semiconductors to telecommunications and consumer electronics companies with its chips ending up in a list of popular gadgets, such as Nintendo's Wii, Apple's iPhones and iPads and an array of phones running Google's Android operating sysScreen Shot 2011-09-12 at 8.06.16 AMtem.

The company has purchased many smaller firms over the years, as The Times' David Sarno noted in a February profile of Broadcom.

At $50 a share, NetLogic's shareholders would be getting a premium in the takeover deal (NetLogic closed Friday at a price of $31.92 per share). The purchase has been approved by both company's boards of directors but still needs U.S. and international regulatory approvals.

Shares of NetLogic soared on the news. They were recently trading at $47.98, up $16.07, or 50%, from their Friday closing price. 

NetLogic, based in Santa Clara, also builds computer chips, working on "multi-core and knowledge-based processors," as well as technology used in next-generation wireless base stations used by telecom companies.

The deal, which the two firms said they expected to complete in the first half of 2012, would help Broadcom expand further into the infrastructure side of the wireless industry and also bring its products to market more quickly.


Google agrees to buy Motorola Mobility for $12.5 billion

Sprint files lawsuit to block merger of AT&T and T-Mobile

Justice Department sues to block AT&T takeover of T-Mobile

-- Nathan Olivarez-Giles

Image: Broadcom Corp.'s logo. Credit: Broadcom

The Skini on set-top boxes


If size matters in the TV set-top box market, the new Skini by semiconductor company Sigma Designs wins by losing.

The Skini -- a combination of pay-TV receiver, Internet TV terminal and home automation hub -- is about the size of a couple of packs of playing cards, and it hangs off a wall outlet like a night light. It uses advanced powerline networking technology to connect to a home network, and Z-Wave wireless networking to receive commands from a remote control and send them to compatible light fixtures, thermostats and other devices.

The company unveiled a reference design for the box Monday. Michael Weissman, the company's vice president of corporate marketing, said he expects to see products based on Skini by Christmas or early next year, including digital media receivers and pay-TV set-tops. Those should sell for less than $100, he said.

That's the right price, and you've got to love the mini Skini's ability to hide behind the TV -- its remote's radio-frequency signals can pass through objects, unlike the infrared signals used by most controllers. Its capabilities are impressive too, at least on paper.

What would truly be compelling is if Skini-based products enabled consumers to combine basic pay-TV services with low-cost Internet video subscriptions, such as Netflix and Hulu, into more affordable video packages. But just because the reference design is capable of doing so, that doesn't mean pay-TV operators will interested in providing those features in their set-top boxes. Any company selling premium tiers and on-demand movies would have little or no incentive to help customers subscribe to Netflix instead.

A coalition of consumer electronics manufacturers, retailers and Internet companies has been pushing the Federal Communications Commission to circumvent that problem by adopting a new standard for set-top interoperability. Called AllVid, it would enable device makers to create gateways that bring multiple sources of audio and video to the TV screen, including pay-TV services, Internet feeds and files stored on home computers.

Not surprisingly, cable operators hate AllVid, arguing that the market, not government, should determine which technologies prevail. They also note that Internet-ready TVs are proliferating, an increasing number of which can receive cable TV service without requiring a set-top box. That's because those sets adhere to the cable industry's unique protocols, which would be useless to set buyers who switch to any other form of pay TV. But cable operators are also starting to deliver programming to devices whose interfaces they don't control, such as the iPad.

The open, multi-function environment envisioned by AllVid is tailor-made for the Skini. A federal mandate for the AllVid interface, Weissman of Sigma Designs said,  "only accelerates the opportunity for this type of technology."

The FCC hasn't ruled yet on AllVid. According to Ryan Lawler of GigaOm, FCC Chairman Julius Genachowski offered attendees at last week's cable industry trade show a typically opaque update on the proceeding, saying the commission would “take steps to spur innovation in and around the TV platform.”


DirecTV considering Netflix-like online service

Bamboom takes over-the-top TV over the top

Two-way battle over: cable wins

-- Jon Healey

Healey writes editorials for The Times' Opinion Manufacturing Division.

Credit: Sigma Designs

Energy-efficient LED bulbs to light U.S. homes

Pharox6W Would you pay $39.95 for a light bulb?

Didn’t think so. But what if it used 90% less electricity than a standard incandescent bulb, cut greenhouse gas emissions and saved you an estimated $280 over its 25-year lifespan?

That’s the challenge facing Dutch start-up Lemnis Lighting today as it begins selling the American version of what apparently is the world’s first dimmable LED bulb compatible with home light fixtures.

LEDs -- light-emitting diodes -- are semiconductors that glow and are the great light hope for slashing carbon emissions from lighting, which consumes about 19% of energy production worldwide.

Lemnis says its Pharox60 LED lasts six times as long as an energy-efficient compact fluorescent light bulb. But unlike CFLs, LEDS don’t contain toxic mercury.

Most often found in electronics equipment or in commercial lighting, LEDs tend to cast a cold light. Lemnis founder Warner Philips said the start-up spent considerable effort to engineer its 6-watt bulb to give off the warm white glow of a 60-watt incandescent.

“What we’ve been working on is to combine the ability to get a warm white light from an LED along with the energy savings,” said Philips, a great-grandson of the founder of the Philips lighting and electronics conglomerate.

“The final challenge is, how do you get people to understand that $40 for a light bulb is not expensive?” he added. “From Day One, they start to save money. The energy savings over the bulb’s lifetime vastly exceeds its cost.”

Philips said one solution would be for utilities to finance the cost of swapping a home’s incandescent bulbs for LEDs and add a fee to customers’ monthly bills. The utilities would profit if lower electricity demand allows them to avoid the expense of building power plants, he said.

And that $39.95 price? That’s a special offer -- the bulb retails for $49.95 -- good until Dec. 31. But Philips said he hopes sales will allow the price to remain at $39.95.

Lemnis, whose U.S. headquarters is in San Francisco, has sold 2.5 million LED bulbs in Europe and aims to sell 10 million worldwide by the end of 2010.

As production ramps up, Philips expects the price of the bulbs to fall. And the company has found one heavyweight early adopter: Google distributed 25,000 of Lemnis’ 5-watt LED bulbs to its employees on Earth Day this year.

-- Todd Woody

Intel earnings point to possible recovery


Image of a silicon semiconductor. Credit: huangjiahui via Flickr.

Bottoms up!

Intel this afternoon gave investors a reason to hoist a beer mug or two, posting $8 billion in second-quarter revenue powered by sales of its Atom processor, used in fast-selling netbook computers, lightweight laptops that sell for as little as $200.

Intel Chief Executive Paul Otellini said the results "reflect improving conditions in the PC market segment with our strongest first- to second-quarter growth since 1988 and a clear expectation for a seasonally stronger second half." 

Translation: Computer makers are expecting a surge of back-to-school shoppers and better holiday sales than in 2008, when consumers reined in nearly all discretionary spending.

The Santa Clara, Calif., chip maker, however, posted a $398-million quarterly net loss, or 7 cents a share, primarily because it paid a record $1.45-billion fine imposed by the European Commission on charges that the company restricted competition in the semiconductor market. It had a $1.6-billion net profit in the second quarter last year. Its $8 billion in revenue represented a 12% improvement over $7.1 billion in sales posted for the first quarter of this year but an erosion from $9.5 billion a year earlier.

Even so, Wall Street loved what it heard, pushing Intel's stock up $1.20, more than 7%, to $18.03 in after-hours trading following the earnings release. The stock earlier in the day had closed up 34 cents to $16.83.

Intel's results kick off the earnings season for the tech sector, with Google coming up Thursday and Apple and Yahoo next Tuesday, followed by EBay, Microsoft and Broadcom later in the week.

-- Alex Pham

Q&A: Silicon Valley Ubermensch Andreas Bechtolsheim explains what the big deal is with cloud computing

Andreas Bechtolsheim
Andreas Bechtolsheim, co-founder of Sun Microsystems and chief development officer of Arista Networks, a Silicon Valley cloud computing company. Credit: Alex Pham / Los Angeles Times.

Google made waves in the tech world this week when it announced plans to release an operating system that would encourage wider use of something called cloud computing.

Although most have never heard of cloud computing, many do it every day. By uploading photos to Facebook, sending messages via Gmail or playing Club Penguin online, users are accessing programs and software files that live far away in cavernous, climate-controlled rooms containing thousands of computers.

To help explain this shift in the way we use computers, we turned to Andreas Bechtolsheim, co-founder of Sun Microsystems and chief development officer for Arista Networks, a Silicon Valley startup that supplies networking equipment used to build these massive arrays of cloud computers.

As it turns out, Bechtolsheim was also one of the first people to invest in Google back in 1998, when the company was just two Stanford geeks with a laptop. His  $100,000 investment in the company started by Sergey Brin and Larry Page, along with several other shrewd calls, turned the Birkenstock-wearing engineer into a billionaire.

We spoke to the 53-year-old serial entrepreneur recently about cloud computing, his investment philosophy and his latest venture, Arista Networks. An edited version of the conversation is below.

Q: What do you make of the potential for cloud computing, both as a market and a technology?

Bechtolsheim: It is a surprising evolution in the history of computing. Every application can now shift to the Web. You can access any application remotely. My startup does the networking plumbing for this.
IDC has estimated that by 2012 the market for cloud computing infrastructure will grow to $42 billion, up from $16 billion in 2008. It’s the fastest-growing slice of the spending on information technology. Right now, it’s small sliver of the overall pie. Most of the spending is for the applications. But it’s a growing slice of the pie.

Q: What are some uses of cloud computing?

Bechtolsheim: Hollywood uses high-performance clusters to ...

Continue reading »

Broadcom halts efforts to buy Emulex

Broadcom Logo The chase is over. After Emulex rejected Broadcom's $912 million offer, its suitor today called off the hostile buyout effort.

Broadcom Chief Executive Scott McGregor, who only two weeks ago sweetened his bid 20% from $764 million, said his Irvine network equipment company will now pursue "other value-creating alternatives." The company said it would not renew its offer when the offer expires July 14.

Emulex Logo The announcement ends a contentious process marked by lawsuits lobbed by both Orange County companies. Broadcom initially had sued to invalidate an Emulex poison pill designed to ward off hostile takeovers. Emulex, based in Costa Mesa, countered with a lawsuit charging that the antics of former Broadcom chief executive Henry Nicholas made the company untrustworthy. 

Nicholas, who is no longer involved in Irvine company he founded, is awaiting criminal prosecution on two federal indictments, one on a stock backdating charge and another alleging he had supplied narcotics to acquaintances.

-- Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.

Ducks owner Henry Samueli pleads guilty in Broadcom stock options case

Broadcom co-founder Henry Samueli pleaded guilty to lying to authorities

Henry Samueli, the co-founder of Broadcom and owner of the Anaheim Ducks hockey team, pleaded guilty to lying to federal authorities who were investigating stock-options fraud at the Irvine-based chip maker.

The agreed-upon penalty: five years of probation and $12.2 million in fines. Samueli won't have to testify for the government, according to court documents.

Read the full story for more details.

-- Chris Gaither

Photo by Christine Cotter / Los Angeles Times

AMD says new graphics chip makes games seem real

A virtual scorpion rendered with the help of ATI Radeon

UPDATE 6 P.M.: OK, so it took a while but here's the scorpion video. Now that it's been all built up like that...


UPDATE 11:18 A.M.: Welcome, Digg masses! You've asked some good questions, and here are some answers.

First, the model number of the new family of graphics card, which AMD code-named the RV770. AMD says it will sell two models starting June 25: The ATI Radeon HD 4850 will cost $200 and the more powerful ATI Radeon HD 4870 will cost $300. AMD's Cinema 2.0 site has a few more details.

Second, you wanted to see the clip. We asked the company for it yesterday but haven't gotten it yet. We'll update the post with it as soon as we can.


We've come a long way since Pong and Space Invaders. But video and computer games are still striving to be both interactive and realistic. Have you seen the "Saturday Night Live" skit of the interview with Grand Theft Auto IV's main characters, Niko and Vlad? Their arms move imprecisely, as if they're puppets underwater.

On Monday, chip maker Advanced Micro Devices, which already supplies the graphics power for the Nintendo Wii and the Xbox 360, showed the "SNL" skit at an event in San Francisco. Then AMD gave a taste of what it says a game maker can do with its new microprocessor: A 30-second clip of what appeared to be a real scorpion skittering around a terrarium, presumably hunted by another equally terrifying bug. The scorpion demo was made by the film director David Fincher (director of "Fight Club") on a computer. Was it a video game? An interactive movie? AMD wouldn't say. But it looked scarily real.

The comparison between that and the GTA IV isn't quite fair. The current generation of game consoles that GTA IV plays on is already a few years old, and AMD's new processor is for state-of-the-art PCs. The processor will be featured on a new graphics card from AMD called the ATI Radeon and will go on sale in a few weeks for $200. The graphics card, which will also be built into some new computers and possibly video game consoles someday, will be able to show special effects in games that many of today's graphics cards don't (most PC games let you turn off those features if your processor can't handle them).

AMD is hoping that it can appeal to developers who want to create games that are of movie quality. It also hopes that moviemakers will use the extra horsepower so they can render film faster and, if they want, make movies more interactive. AMD calls this strategy Cinema 2.0.

"The lines between the two mediums are blurring," said Rick Bergman, senior vice president and general manager of AMD's Graphics Product Group.

AMD is not alone in appealing to the video game developers. Nvidia today has a new offering too, as Dean Takahashi over at Venture Beat details.

Game developers have had to decide between making games more visually realistic or creating figures that move quickly and smoothly, said Nathan Brookwood, principal analyst with Insight 64. "Now the hardware is powerful enough that they can do effects that make images look better without limiting the performance," he said.

Now it's a fight between graphics cards -- AMD or Nvidia.

-- Michelle Quinn

Image from the AMD technology demo of David Fincher's work-in-progress "Bug Snuff," courtesy of AMD

FTC opens formal antitrust investigation into Intel

Intel CEO Paul Otellini's company faces a formal antitrust investigation

New Federal Trade Commission chairman, new attitude toward Intel's business tactics. Under new chairman William Kovacic, the agency has bumped up its antitrust investigation, from informal to formal. It's probing how the world's largest chip maker, which is based in Santa Clara, Calif., wields its power. Jim Puzzanghera has the full story.

-- Chris Gaither

Photo: Intel CEO Paul Otellini. Credit: Manjunath Kiran / EPA

Nicholas indictment also alleges prostitutes, mile-high drug use

The case against Henry T. Nicholas III is getting juicier.

Broadcom founder Henry Nicholas One of the two indictments against the Broadcom founder that were unsealed today alleged that Nicholas put Ecstasy in the drinks of unsuspecting high-tech executives, bought prostitutes for customers of the Irvine-based chip company and both used and distributed illicit drugs, including cocaine and methamphetamines.

The second indictment deals with your classic Silicon Valley scandal: It accuses Nicholas and a co-defendant of conspiracy to backdate Broadcom stock options to boost their value without properly reporting the expense to shareholders.

Nicholas' lead attorney, Brendan V. Sullivan Jr., responded: "Dr. Nicholas will contest these charges vigorously. He is confident that he will be fully vindicated."

For aficionados of rich-people-being-naughty stories, there's this delicious tidbit from the story by Scott Reckard and Kim Christensen: The pilot of a private plane taking Nicholas and guests from Orange County to Las Vegas had to put on an oxygen mask because they smoked so much marijuana.

The partying wasn't reserved for the air, the government says. According to the story, the indictment also lists a few properties allegedly used for nefarious purposes:

  • An equestrian estate in Laguna Hills, where Nicholas had constructed a warren of tunnels and underground rooms, including one that contractors alleged was intended to become a secret "sex lair."
  • A warehouse-office complex in nearby Laguna Niguel, which contractors said was used for the same purposes and nicknamed "The Ponderosa."

If you're interested, here are PDFs you can download of the drug indictment or the stock-options indictment.

-- Chris Gaither

Photo by Richard Hartog / Los Angeles Times


Recommended on Facebook


In Case You Missed It...


How to Reach Us

To pass on technology-related story tips, ideas and press releases, contact our reporters listed below.

To reach us by phone, call (213) 237-7163


Andrea Chang
Armand Emamdjomeh
Jessica Guynn
Jon Healey
W.J. Hennigan
Tiffany Hsu
Deborah Netburn
Nathan Olivarez-Giles
Alex Pham
David Sarno