Cirrus Logic Acquires Audiologic; Gains Revolutionary PWM & Low-power Audio Technologies - Company Business and Marketing

Edge: Work-Group Computing Report, August 2, 1999

Cirrus Logic Inc. (Nasdaq: CRUS), the world's leading supplier of audio ICs, Tuesday announced an acquisition that enriches its portfolio of advanced audio technologies and bolsters its position to be a leading supplier in the rapidly emerging Internet music market. With its acquisition of Colorado-based AudioLogic Inc., Cirrus Logic leapfrogs to pre-eminence in next-generation audio signal processing and amplification.

AudioLogic's intellectual property encompasses the highest performance, all-digital pulse width modulation (PWM) technology for next-generation audio systems, and the world's lowest power digital signal processor (DSP). Developed to meet the extraordinary requirements of hearing aids, and suitable for virtually all audio applications, the AudioLogic technologies deliver 2 to 3 times better power efficiency than alternative power amplifier and DSP methods. Cirrus Logic expects to leverage these new technologies to lead the industry in developing highly integrated, low-power chip solutions for portable devices, such as the MP3-class audio players.

Another application of the AudioLogic technologies is the ubiquitous high-performance audio amplifier which represents a market opportunity measured in hundreds of millions of dollars in consumer products alone. Beyond significantly expanding the total available market for Cirrus Logic's Crystal audio brandthe market leader in the $1.6 billion audio IC market according to research firm Forward Conceptsthe acquisition adds cutting edge PWM and ultra-low power DSP technologies to existing competencies. Spanning a range of emerging applications such as Internet audio players and DVD systems, the Crystal product line includes high-performance analog-to-digital and digital-to-analog converters (ADCs and DACs), codecs, application-specific DSPs, and embedded software.

"With the AudioLogic acquisition, we are extending our lead in high-performance analog and mixed signal integration for embedded applications, along with enhancing the appeal of our top-selling Crystal audio product line," said David D. French, Cirrus Logic's president and chief executive officer. As an early pioneer of low-power techniques, AudioLogic has built a substantial portfolio of over 20 patents issued or pending.

Given the relentless trend for lower-power ICs, French predicts that digital amplifiers such as the AudioLogic PWM could replace linear amps altogether. "This new digital amplifier technology could cause a veritable revolution in audio system design," said French. "Over the next five years, I expect PWM architectures to emerge as one of the primary standards for audio data conversion."

Hearing Aids Drive Development of Ultra Low Power Technology Designed specifically for battery-powered hearing aid systems"a very tough benchmark" according to AudioLogic president and CEO Jason Carlson * AudioLogic's PWM technology promises a revolution in DSP, DAC and digital power amplifier design. Unlike alternative amplifier approaches, including some of the newest high-profile techniques that still use the more expensive, and less efficient analog technology, PWM is completely digital, yet provides signal quality equal to the best linear amps.

"It's tough to do digital signal processing in hearing aids because they have tiny little batteries that operate at one volt," said AudioLogic founder John Melanson. "It requires very sophisticated signal processing and demands very good sound quality. Having met these standards, we mastered skills that apply to other exciting audio applications."

As a totally digital amplifier, PWM lends itself to system-on-chip integration, and is thus suitable for higher density and smaller geometry semiconductor fabrication processes. This is a key advantage that is expected to hone Cirrus Logic's edge in all the audio market segments the company currently supports--computer, consumer, professional and automotive.

Ubiquitous in Audio Applications Battery-operated and portable products are obvious beneficiaries of PWM and low-power DSP, whether in portable electronics such as audio headsets and MP3 Internet music players, personal electronics such as CD and mini-disk players, boomboxes, or musical instrument amplification. Further, because of its outstanding power efficiency, PWM technology can also enhance "tethered" audio applications that require a constant power source, such as automotive audio, home theater systems, and large venue installed sound systems. According to Keith Essency, P. vice president and general manager of Crystal Audio Products Division, digital amplifiers provide the remaining step for transitioning audio from analog to digital technology.

"With digital amplification, I expect the conversion from analog to digital audio will accelerate," said Essency. "Much as audio is distributed and processed today using digital technology, audio will also be amplified digitally. With this acquisition, Cirrus Logic takes the lead in driving this change."