Marvell to Acquire UTStarcom Div. for $24M

SANTA CLARA, Calif. and ALAMEDA, Calif., Dec. 23, 2005 -- Marvell, a developer of storage, communications and consumer silicon solutions, has agreed to buy substantially all of the assets of UTStarcom Inc.'s semiconductor design business division, including the assets from UTStarcom's acquisition of Advanced Communications Devices Corp. in December 2001, for $24 million.

UTStarcom, a provider of IP-based networking solutions and services with headquarters in Alameda, said its semiconductor design business is primarily focused on developing wireless communications solutions, including 3G wireless application technologies and silicon solutions for Personal Handyphone System (PHS) products.

Under the terms of the agreement, Marvell will purchase substantially all of the assets of UTStarcom's system-on-chip semiconductor business division for $24 million in cash. The acquisition is expected to close within 60 days, pending regulatory approval and other closing conditions. Marvell may pay an additional $16 million upon certain defined milestones being achieved. Upon closing, Marvell may record a one-time charge for purchased in-process research and development expenses. The amount of that charge, if any, has not yet been determined.
UTStarcom CEO and President Hong Lu said that the company's divestiture of its semiconductor business is part of a corporate restructuring plan announced earlier this year which allows the company to focus on its broadband, wireless and handset products.
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