Level One claims two 'technology acquisitions.'

Electronic News, June 5, 1995 by Crista Hardier

SACRAMENTO, CALIF. -- Level One Communications, Inc. last week made what it described as strategic technology acquisitions involving component-oriented development houses Maker Communications, Inc. and San Francisco Telecom, Inc. (SFT). Level One said the transactions will increase its presence in the asynchronous transfer mode (ATM), synchronous optical network (SONET), cable TV and wireless communication market segments.

Level One said the deals will not affect the company's short-term wafer demand, nor will they cause any material impact on its 1995 earnings. The transaction with Maker reportedly was completed on May 20, while the SFT deal is set to close this week.

The company does not have any specific product developments in mind as a result of the acquisitions, but will take the next few months to assess the possibilities, according to Francois Crepin, senior VP of business development for Level One. He was emphatic, however, that the deals do not represent a change in the company's business direction.

"The strategy to participate in this market was already in place. We view these acquisitions as contributing to accelerating and broadening our presence in these markets," he stated.

Maker Communications of Waltham, Mass. will operate as a partially-owned subsidiary of Level One. The company would not disclose what percentage of Maker was purchased, although it was revealed that Level One will be the sole licensee of Maker's intellectual property.

Maker develops silicon technology, firmware and design tools for high-speed ATM networks. The company--consisting of a five-person engineering team--is said to be designing a family of chips to support ATM networks operating at speeds up to 622Mbps; the first product is currently scheduled to be completed in the second half of 1995.

"Level One felt to be successful in the ATM market as a chip manufacturer, we needed access to a software-based approach, relying on a dedicated programmable RISC engine. We do not believe in inflexible hardware solutions or software-based solutions using general purpose engines. Maker has an approach that is exactly what we had in mind," Mr. Crepin said.

SFT, headquartered in San Francisco, will operate as a wholly-owned subsidiary of Level One when that transaction is completed. The company develops board-level, module and ASIC solutions for the SONET, cable TV and wireless markets. The only current product acquired in the deal is an E1/E3 mapper ASSP device that multiplexes 2Mbps twisted-pair channels into 35Mbps channels on a fiber-optic network.

"The SFT group has very deep expertise in SONET/SDH systems, in QAM/QPSK modulation schemes, in Cable TV, in high-speed synchronous transmission systems, in RF design and in wireless tranceivers. That is a fairly unique combination of skills. It would have taken us a lot of time to put together a team with that type of experience," Mr. Crepin said. "Their talents are extremely synergistic with our activity plans--and I can say the same for Maker."

All employees and executives of Maker and SFT will be retained, and the companies will remain in their current communities, Level One said. In addition, an office of the general manager was created at SFT, which will be co-chaired by SFT's president, Menno Marringa, and Mr. Crepin.