New York, Sept 30: Applied Micro Circuits Corp. said on Monday it paid $47 million for the intellectual property rights to a communications switch product that is part of IBM's struggling microelectronics business. Armonk, New York-based IBM is selling the PowerPRS switch fabric product line as it focuses on its PowerPC microprocessor, specialty semiconductors and the foundry business in which it makes microchips for other companies, IBM spokesman Richard Bause said.
IBM's technology group, which includes microelectronics, has been losing money in part due to the slow ramp-up of a new chip-making plant in East Fishkill, New York. It does not expect revenue to improve until the fourth quarter.
San Diego, California-based Applied Micro, which makes communications chips, said buying the PowerPRS switch fabric product would help it expand its offering of switches, which are used to direct information traffic on networks.
Applied Micro also said it is working on the legal requirements and due process needed to buy certain related assets of La Compagnie IBM France, a French affiliate of International Business Machines Corp., for $3 million.
That purchase could include the transfer of a small group of employees in Europe, an IBM spokesman said.
IBM, the world's largest computer company, will make the PowerPRS line for AMCC. AMCC is already a foundry customer of IBM, which also makes chips for other companies, such as Apple Computer Inc. Bureau Report