This gives some idea of what TI has planned for ADSL.ÿ It's a FAQ from the TI site about the Amati acquistion.
1. Why are you buying Amati?
Our companies create a natural fit: the most powerful digital signal processing technology and the industry standard xDigital Subscriber Line (ADSL) technology joining together to meet the requirements of next-generation Internet access and data communications. This acquisition will help TI be the leading supplier of access networking solutions.
2. Why did Amati drop the Westell offer?
You'd have to ask them.
3. Did you make an earlier bid, and if so, was it rejected? Why?
As a policy, we do not comment on possible past or future actions regarding mergers or acquisitions.
4. What are the terms of the deal?
$20 in cash per share of Amati common stock in a tender offer for all outstanding shares.
5. How many employees are at Amati and what are annual revenues/profits?
There are about 120 employees. In the latest fiscal year, FY97 (ending Aug.2, 1997), sales were $13.2 million, with a net loss of $12.2 million.
6. Will Amati become a part of TI or remain a separate entity?
The company will become a wholly-owned subsidiary of Texas Instruments, reporting into TI's Semiconductor Group.
7. Where are their operations?
Headquarters and all employees are in San Jose, California
8. Will the acquisition include all of Amati employees?
Yes. All Amati employees will remain employees of the new subsidiary.
9. Does this mean TI is getting back into the modems business? Is this a change in your strategy of focusing on semiconductors?
No, in fact, this acquisition will strengthen our focus on DSP solutions by giving TI additional resources (software and systems knowledge) for future DSP applications as well as an enhanced IP position. We do not intend to pursue the end equipment market, but applications of DSP technology in chips and chip sets.
10. When will the acquisition close?
We expect it to close in 4Q97, pending HSR approval, and completion of the tender offer.
11. What is the impact of the acquisition on the 56K technology program with 3COM?
We believe customers will view this combination as positive - putting TI's resources and manufacturing strengths behind the innovation and IP position of Amati. We are already working with 3COM on next generations designs for ADSL, and this will let us work more closely.
12. Amati has already licensed many companies around the world, including ADI, Alcatel, Motorola, NEC - will TI honor these licenses?
We do not presently see any significant changes in Amati existing licensing policy. We share the belief that the Amati ADSL approach for high-speed access will be the global standard, and we will continue to work with licensees to accelerate the deployment of that standard.
13. Would TI license future developments made after the acquisition?
Yes. We are committed to open standards and interoperability of ADSL in the marketplace, and will continue to provide fair and equitable licenses of relevant patents and intellectual property.
14. What does this mean for the competition?
The marketplace for this technology is very competitive. TI views this acquisition as allowing TI to expand its presence in the technology for high-speed Internet access and video applications.
15. How is the program going with 3COM on 56K modems?
We continue to see strength in the modem market. It appears that consumers understand that the 3COM 56K modem can be upgraded via the Internet, so they don't need to delay purchase of a modem until the standard is set. They are protected from obsolescence.
16. How strong are the Amati patents?
Amati has a very important patent position that is highly regarded throughout the industry. They recently have been widely recognized for developments in high-speed Internet access.
17. TI was already licensed by Amati, why would you want/need to buy the company?
We believe the combination can strengthen our DSPS business by helping to focus efforts on the highest growing areas of the market, and make use of TI's strengths in silicon manufacturing and DSP and mixed-signal analog technology. In addition, the acquisition strengthens our IP position for high-speed Internet access and digital video applications.
18. How will TI treat the royalty income from the Amati license agreements? How large do you expect this to be?
Royalties from Amati licenses will be counted as royalty revenues. The amount of the royalty revenues will be a function of the ADSL modems manufactured in the industry, but we do not have a forecast to make public at this time. As indicated in the news release, we believe the semiconductor market will reach more than $6 billion for ADSL applications over the next decade.
19. When will you have product available?
We will deliver a fully programmable DSP-based ADSL chipset solution to our customers in 1Q98.
20. Will Amati continue to produce its current product line? Will these products carry the TI name and logo?
Products from the new subsidiary will carry the TI brand name.
21. How will this acquisition affect products that are currently in development at Amati?
While we cannot comment on specific products, TI will continue to support product efforts that contribute to delivering robust access and broadband solutions.
22. How will this acquisition affect either company's participation in ADSL-related standards bodies?
As the leading developer of Discrete Multi-tone Technology (DMT) for ADSL applications, Amati has been a significant contributor to such standards bodies as the American National Standards Institute (ANSI) and the International Telecommunications Union (ITU). TI also has active positions on these bodies as well as many others. Together, we believe that our efforts will accelerate our contributions and enable the rapid development of ADSL standards.
23. How will this acquisition affect TI's $100 million venture capital fund? Does TI plan to invest in companies or will you simply purchase the ones which truly add value to TI?
This will not have any effect on our DSP venture fund, which was set up to fund seed money to start up companies developing the next generation uses for DSP technology. |
