OAKT divestiture................
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Story posted at 7 p.m. EST/4 p.m. PST, 1/22/98
Oak Technology to divest
graphics, audio chip business
SUNNYVALE, Calif.--Oak Technology Inc. here today said it will sell off
its PC graphics and audio chip business and focus all of its efforts on three
core market segments: optical storage, consumer electronics and digital
office equipment.
"The audio and graphics semiconductor markets are highly competitive and
we believe they offer limited opportunities for Oak," said David D. Tsang,
chairman and chief executive officer of the 10-year-old company. "We also
believe that there is value in what we have developed and that for the right
company, acquiring these businesses can offer a tremendous head start."
The PC graphics and audio markets represented about 5% of Oak's $49.4
million in revenues during the quarter, ended Dec. 31. Oak reported today
that its net come fell sharply in that quarter to $7.6 million compared to
$13.2 million in the same period a year ago when its sales totaled $47.6
million.
The company also named Richard Black, a board member, as its new
president. Tsang, who held that position, will continue as chairman and
CEO.
The optical storage business continued to account for the largest portion of
Oak's sales in the recent quarter, representing 80% of the revenues.
Oak said it now anticipates a loss in the current quarter because of cost
pressures in its chip markets, the growth of sub-$1,000 PCs requiring lower
priced ICs, and the Asian financial crisis.
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