Silicon Spice acquired by Broadcom for $1.2 Billion  

Mt. View, Calif. August 7, 2000 -- Silicon Spice headed by Vinod Dham has been acquired by Broadcom, a publicly traded provider of integrated circuits for broadband communications. Silicon Spice is a developer of semiconductor technology, software, and development tools for voice, fax, and data packet transportation.

The all-stock acquisition is valued at $1.2 billion. Mountain View, Calif. based Silicon Spice provides core processing engines within the gateway and access devices that connect public switched telephone networks to packet based networks.

Broadcom chief executive Henry Nicholas said Spice's architecture for communications processors, which enables banks of chips to be replaced with a single piece of silicon, is Broadcom's most strategic buy yet and opens a "multibillion-dollar" opportunity.

The deal is Broadcom's largest ever. It is the seventh acquisition the company has announced this year and its 12th since last year.

Vinod DhamVinod Dham joined Silicon Spice in April 1998. Dham was one of the architects of Intel's Pentium chip. Later, Dham worked on the K6 for Advanced Micro Devices.

Dham said being acquired by Broadcom will allow Silicon Spice's technology to be used more broadly. In addition to its current target markets, such as one for gear that allows company phone systems to connect to the Internet, Broadcom plans to use the underlying technology in third-generation wireless base stations and digital subscriber line access multiplexers.

Silicon Spice had an early investment from Cisco Systems, which is also one of its customers.

Venture firm Kleiner Perkins Caufield & Byers is another Silicon Spice investor. Kleiner partner Vinod Khosla has been involved in some of the larger communications processor deals in the past year, including Cisco's $6.9 billion purchase of Cerent and the $4.3 billion acquisition of Siara by Redback Networks.