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Analog Scouting for Acquisition in India By Y.P. Rajesh BANGALORE, India (Reuters) - Semiconductor company Analog Devices Inc is scouting to acquire an Indian software firm with sophisticated capabilities in communications technology, its chairman said on Monday. ``We are talking to some small companies that did very well with our work and may be getting into an acquisition mode,' Ray Stata told Reuters in an interview in the southern Indian city. Analog officials said the likely target would be a software company in the communications area and the deal would certainly be closed in 2000. ``Typically our approach is not quarrying for marketshare but quarrying for talent,' Stata said. He said Analog had in the past made acquisitions in Wales, Scotland and within the United States. The Indian acquisition would be the firm's first in Asia. A leading global maker of computer chips that transform sound and video into digital data, Analog has been banking on communications applications and devices that have boosted growth since the semiconductor market bounced back in mid-1999. The company has a product development center and a software tool development center in the southern Indian city. Stata said that Analog's Indian centers witnessed little investment or growth during the three years that the semiconductor industry went through a slump. ``Now we are in a situation where profits are up and we are back into the investment mode,' he said. ``So the idea is now to move up the design centers for expansion.' Recovery Strong Stata said the Asian semiconductor market had recovered from the economic crisis and was growing larger both in internal consumption as well as a base for re-exports. He said Asia accounted for 20-25 percent of Analog's current sales and Japan accounted for another 12 percent. ``If you take Korea for example, they have decided to wire up the whole country with ADSL (asymmetric digital subscriber lines). Samsung and Hyundai are key suppliers not only in that market but also in the export market and Analog has captured 90 percent of that business,' Stata said. ADSL technology, of which Analog Devices chipsets are a part, allows high speed communications transmissions over traditional phone lines. Analog had in December said 180,000 of its ADSL chipsets will be used in the 90,000 ADSL lines Korea Telecom is planning to install by February. Analog officials said South Korea has planned to install a total of one million telephone lines with ADSL during 2000. Stata said although 50 percent of Analog's total sales would soon come from the communications sector, there was no reason to worry as it is a fragmented sector and unlikely to witness uniform ups and downs. ``I guess if it were 90 percent we might worry a bit about that (imbalance). Certainly at 50 percent it's a pretty good balance,' Stata said. ``I don't think the communications industry will uniformly go up and down. So if you want to grow you got to be where the growth is.' dailynews.yahoo.com