Oak Acquires Viewpoint For $10M To Bolster CD

Electronic News, August 3, 1998

Sunnyvale, Calif. -- Oak Technology, based here, last week acquired Santa Clara, Calif.-based ViewPoint Technology in a $10.1 million cash transaction designed to further bolster Oak's CD-rewritable (CD-RW) controller market push.

Oak Technology earlier this year made the decision to get out of the PC graphics and PC audio businesses to focus more on its three core areas: optical storage, consumer electronics and digital office equipment (EN, Feb. 2). Richard Black, president of Oak, said the acquisition of ViewPoint will factor into the "future plans" of the company's CD-RW strategy.

The intellectual property gained from the acquisition will be critical for the roadmap of CD-RW products from Oak. ViewPoint apparently developed a CD-RW controller that supports high encoding speeds for next-generation rewritable drives that Oak said will complement its own block decoder controllers.

"Oak has approximately two-thirds market share for rewritable controllers today and the market is growing fast," said Mr. Black. "The CD-ROM business has matured to a certain level but the CD-RW area still is a very good opportunity for the optical storage market with all of the DVD rewritable wars going on right now." Some market researchers say the CD-RW market could grow at up to a 115 percent compound annual growth rate (CAGR) between now and 2002.

ViewPoint will be folded into Oak's optical storage business unit and all ViewPoint employees will become Oak employees with former ViewPoint president/CEO Edwin Chu signing on as VP of operations for Oak.

"We are working on getting faster controllers for faster drives and more accurate capabilities," Mr. Black commented.

Oak might need to develop those faster controllers for CD-RW quickly because Cirrus Logic last week introduced the CR3470 and CR3475 CD-RW devices boasting a 40X performance read time and 10X performance write speeds for CD-RW media (see related story on this page).

However, Oak also recently bought the assets of Hyundai Electronics America's defunct Odeum subsidiary for $4 million in cash in an effort to bolster the MPEG audio and video technology in its consumer electronics divisions (EN, April 27). With ViewPoint and Odeum, Oak has moved to next generation products in its core businesses.