IRVINE, Calif.--After several months of negotiations, Broadcom Corp. here announced the acquisition of San Jose-based Stellar Semiconductor Inc., which supplies reusable design cores for three-dimensional graphics. Broadcom said it was purchasing Stellar for 785,223 shares stock, valued at $161 million, to expand its portfolio of graphics and digital video technologies for advanced set-top boxes, digital TVs, and Internet appliances.
"This acquisition provides Broadcom with an important piece of technology required to deliver high-end 3-D games to digital set-top boxes," said Henry T. Nicholas III, president and CEO of the Irvine-based company. "The cost-effectiveness of the Stellar 3-D graphics technology will also enable and accelerate the development of handheld Internet appliances with photo-realistic images."
The acquisition is the second announced by Broadcom in the past two days. On Tuesday, the company said it was buying Digital Furnace Corp., an Atlanta-based supplier of communications algorithms and software for interactive services over broadband networks (see March 1 story).
Seven-year-old Stellar employs 30 workers and has developed a patented 3-D visual processing architecture, called PixelSquirt, which the company says offers significant image quality and cost advantages over other approaches. The PixelSquirt architecture renders only the final visible pixels displayed on a scene, which Stellar says requires up to 80% lower memory bandwidth and reduced the memory size by as much as 66% vs. other 3-D designs.
"After working with Broadcom for nearly a year, we're excited about combining forces to address the burgeoning consumer digital entertainment market," said Sandeep Gupta, chief executive officer of Stellar. "The combination of Broadcom's and Stellar's technology, design, production, and marketing will enable Broadcom to offer lower-cost system solutions with compelling visual processing capability."
Broadcom said it will account for the acquisition as a pooling of interest. A one-time charge will be taken in the first quarter to cover expense related to the transaction.