SUNNYVALE, Calif. -- Jul 15, 2008 -- Applied Micro Circuits Corporation (NASDAQ: AMCC), a global leader in embedded Power Architecture(R) processing, optical transport and storage solutions announced it recently signed an agreement for the sale of certain patents which provides the Company with an "intellectual property revenue stream" totaling $33 million that will be payable over the next 3 years. A total of $3 million of this amount is to be received by the Company and reflected in its September quarter revenues. We believe this transaction validates AMCC's IP Monetization Program and further enhances AMCC's leadership position with key players in the industry.
AMCC is a company rich in intellectual property. During the last three years the strategic direction of the Company has changed in such a way that certain valuable patents are no longer core to its strategic direction. These patents relate to non-core products, foundry and other items that are not relevant to the Company's product road maps. As such, AMCC has embarked on a program to monetize this intellectual property and to consider further productization of its strategic and non-strategic patents and related patent rights.
The specific terms of the transaction are confidential, but the Company retains a right to continue using the claimed inventions in the transferred patents in conducting its current and future business. The Company's Chief Financial Officer, Bob Gargus, stated: "As a company, we have invested a large percentage of our revenues on research and development and this is a great way to improve our overall return from these investments. This is a project we started back in calendar 2006 when we broke out the non-focus revenues and began to analyze our patent portfolio in detail. This contract boosts our IP Monetization Program; a program that we hope will result in a sustainable long-term IP revenue stream in the next three-to-five years."
AMCC's IP Monetization Program involves the use of an elite group of specialists with deep technology backgrounds and broad market awareness. They are chartered to analyze multiple markets and technologies and architect next generation solutions that will be available to seed new opportunities. The group guides the Company in building an IP portfolio consisting of many broad patents with the goal of protecting these valuable solutions and staking a claim on the IP landscape before the Company's competitors. We believe this helps ensure alignment with both our existing and targeted markets while adding a steady stream of new innovations and patents to the portfolio.
AMCC provides leadership semiconductor solutions to process, transport, and store digital information for the world's wired and wireless networks. As a leading supplier of Power Architecture(TM) based processors and with world-class expertise in SONET and Ethernet protocol processing, PHY technology, Storage processors and RAID controllers our products are the foundation of the IP Communications Revolution. AMCC's 3ware(R) SAS and SATA RAID controllers deliver cost-effective, high-performance, high-capacity storage for enterprises and consumers worldwide in applications like disk-to-disk backup, near-line storage, network-attached storage (NAS), video, and high-performance computing. For further information regarding AMCC, please visit our website at http://www.amcc.com.