NetLogic Microsystems

NetLogic Microsystems was an American fabless semiconductor company that developed high-performance integrated circuits for the infrastructure layer of digital communications. Founded in 1995 by Norman Godinho and Varad Srinivasan, the company built its business around specialized silicon used in data-center, enterprise, wireless and wireline networking equipment rather than consumer devices. Its portfolio included knowledge-based processors, multi-core network processors, content processors, content-addressable memory and network search engines, together with physical-layer devices for high-speed Ethernet and wireless base stations. The company operated in a market where equipment manufacturers needed increasingly capable chips to inspect, classify, route and manage large volumes of traffic. NetLogic’s products were designed to accelerate functions such as packet lookup, policy enforcement, traffic management, address resolution and other computationally intensive networking tasks. Its customer base included major infrastructure and communications companies such as Alcatel-Lucent, Cisco Systems, Dell, Ericsson, Google, Hewlett-Packard, Huawei Technologies, Juniper Networks and Nokia-Siemens Networks. NetLogic expanded both organically and through acquisitions. In 2007 it agreed to acquire Aeluros, a privately held developer of interface technologies and semiconductor products. The transaction broadened NetLogic’s capabilities in network interfaces and physical-layer connectivity. In 2011 it acquired Optichron for $22 million, adding technology associated with wireless infrastructure and digital front-end applications. The company also adopted an implementation system from Magma Design Automation in 2010 as part of its chip-development process. Under chief executive Ronald Jankov, NetLogic became a public company on the NASDAQ exchange in July 2004, trading under the symbol NETL. The company reported strong growth during the period following its initial public offering. Reference material states that its annual growth rate from the 2004 IPO through 2011 was approximately 39 percent, while its 2011 gross margin exceeded 70 percent and net income margin exceeded 25 percent. NetLogic was also described as holding more than 800 patents and received the Global Semiconductor Alliance’s Most Respected Emerging Public Semiconductor Company recognition for three consecutive years from 2009 through 2011. Broadcom Corporation agreed in September 2011 to acquire NetLogic in an all-cash transaction valued at approximately $3.7 billion. The offer represented a substantial premium to NetLogic’s market price, and shareholders were to receive $50 per share. The transaction was Broadcom’s largest acquisition at the time and its first acquisition of a publicly traded company. It closed in February 2012. Broadcom sought to strengthen its networking and communications-chip portfolio through the transaction, while NetLogic’s independent corporate identity and public-company status ended as a result. NetLogic had approximately 800 employees worldwide and reported $405.4 million in revenue for its final fiscal year as a standalone company. The company is therefore best understood today as a former semiconductor brand and technology portfolio absorbed into Broadcom, rather than as an active independent business.

NetLogic Microsystems was established in 1995 by Norman Godinho and Varad Srinivasan as a developer of specialized semiconductor technology for networking and communications infrastructure. Its business model was fabless: the company designed integrated circuits and relied on external manufacturing partners rather than operating its own semiconductor fabrication plants. This structure allowed it to concentrate on architecture, design, software support and relationships with equipment manufacturers. The company’s technology addressed demanding tasks inside routers, switches, wireless base stations and other communications systems. Its products included knowledge-based and multi-core processors, content processors, content-addressable memory and network search engines. These devices helped infrastructure equipment identify and process packets, perform high-speed table lookups, apply traffic policies and manage increasingly complex network workloads. NetLogic also developed physical-layer products for 10 and 40 Gigabit Ethernet and digital front-end PHYs for wireless base stations, giving it exposure to both wired and wireless infrastructure markets. NetLogic became a public company on NASDAQ in July 2004 under the ticker NETL. During the following years it expanded its product range and customer relationships. Its reported customers included global networking, computing and telecommunications companies such as Alcatel-Lucent, Cisco Systems, Dell, Ericsson, Google, Hewlett-Packard, Huawei Technologies, Juniper Networks and Nokia-Siemens Networks. The breadth of this customer list reflected the company’s role as a component supplier to large infrastructure platforms rather than a consumer-facing semiconductor brand. Acquisitions formed an important part of the company’s development. In October 2007, NetLogic agreed to purchase Aeluros, a privately held company working on interface technologies and semiconductor products. The deal strengthened NetLogic’s presence in network-interface and connectivity applications. In December 2010, NetLogic began using an integrated-circuit implementation system developed by Magma Design Automation, supporting the company’s chip-design process. In 2011, it acquired Optichron for $22 million, adding capabilities associated with wireless base-station digital front-end products. The period after the IPO was characterized by strong reported growth. Reference material states that NetLogic grew at an annual rate of approximately 39 percent from its 2004 IPO through 2011, substantially above the average growth rate cited for semiconductor companies. It also reported gross profit margins above 70 percent and net income margins above 25 percent in 2011. The company had been granted more than 800 patents and was recognized by the Global Semiconductor Alliance as the Most Respected Emerging Public Semiconductor Company in each of three consecutive years, 2009, 2010 and 2011. On September 12, 2011, Broadcom Corporation announced an agreement to acquire NetLogic for approximately $3.7 billion in cash. The offer was reported as a 57 percent premium to NetLogic’s closing share price on September 9, and the agreed consideration was $50 per share. For Broadcom, the transaction was its largest acquisition to that point and its first purchase of a publicly traded company. The strategic rationale was to enhance Broadcom’s communications-chipset portfolio, particularly in networking and infrastructure processing. The transaction closed in February 2012. NetLogic had approximately 800 employees worldwide and reported $405.4 million in revenue for its final fiscal year as an independent company. Following completion, NetLogic ceased operating as a standalone public company. Its technology, personnel and product activities were absorbed into Broadcom, and the NetLogic corporate brand became defunct. The company’s historical significance lies in its role as an independent specialist in network processors, content-addressable memory, search acceleration and infrastructure physical-layer silicon.

• 2012

  Standalone operations end

  [1]NetLogic Microsystemsen.wikipedia.org

  Broadcom completed the acquisition in February, ending NetLogic’s independent corporate existence.

• 2011

  Optichron acquired

  [1]NetLogic Microsystemsen.wikipedia.org

  NetLogic acquired Optichron for $22 million and continued expanding into wireless infrastructure silicon.

• 2011

  Broadcom acquisition announced

  [1]NetLogic Microsystemsen.wikipedia.org

  Broadcom agreed to acquire NetLogic in a cash transaction valued at approximately $3.7 billion.

• 2010

  Chip-design implementation system adopted

  [1]NetLogic Microsystemsen.wikipedia.org

  The company began using an implementation system from Magma Design Automation in its integrated-circuit development process.

• 2009

  First Global Semiconductor Alliance recognition

  [1]NetLogic Microsystemsen.wikipedia.org

  NetLogic was named the Global Semiconductor Alliance’s Most Respected Emerging Public Semiconductor Company, beginning a three-year run of the recognition.

• 2007

  Aeluros acquisition agreement

  [1]NetLogic Microsystemsen.wikipedia.org

  NetLogic agreed to acquire Aeluros to broaden its network-interface and semiconductor technology portfolio.

• 2004

  NASDAQ listing

  [1]NetLogic Microsystemsen.wikipedia.org

  NetLogic became a public company on NASDAQ under the ticker NETL, with Ronald Jankov serving as chief executive.

• 1995

  Company founded

  [1]NetLogic Microsystemsen.wikipedia.org

  Norman Godinho and Varad Srinivasan founded NetLogic Microsystems as a developer of specialized semiconductor products.

High-performance semiconductor solutions for communications infrastructure, specializing in packet processing, network search, memory-intensive lookup and physical-layer connectivity.

• Network processors

  Knowledge-based processors

  Specialized processors designed to accelerate complex searches, classification and policy decisions in networking equipment. They were aimed at infrastructure systems that needed to inspect and route traffic at high speed while supporting large and changing rule sets.

• Embedded and network processors

  Multi-core processors

  Multi-core devices provided processing capacity for data-center, enterprise and communications systems. Their role was to handle networking workloads and embedded control tasks in equipment where throughput and parallel processing were important.

• Network search silicon

  Content processors and network search engines

  These products supported rapid lookup and matching of network information, including forwarding, access-control and traffic-management data. They were intended for routers, switches and other systems that needed hardware acceleration for packet and policy searches.

• Specialized memory

  Content-addressable memory

  Content-addressable memory devices allowed systems to search stored values by their content rather than by a conventional memory address. In networking equipment, this capability was useful for fast table lookup and classification operations.

• Ethernet physical-layer products

  10 and 40 Gigabit Ethernet PHYs

  NetLogic supplied high-speed Ethernet physical-layer devices for communications equipment. These products handled the electrical and signaling functions required to connect networking systems over 10 and 40 Gigabit Ethernet links.

• Wireless infrastructure silicon

  Wireless base-station digital front-end PHYs

  These physical-layer products targeted wireless base-station infrastructure and digital front-end applications. They extended NetLogic’s reach beyond wired networking into the radio-access equipment supply chain.

• Embedded processors

  Low-power embedded processors

  Low-power embedded processors were intended for infrastructure and embedded systems where energy efficiency and dedicated processing were important alongside networking functionality.

• 2011

  Acquire OptichronM&A

  Background

  NetLogic pursued additional technology for wireless infrastructure and digital front-end applications.

  Action taken

  NetLogic acquired Optichron for $22 million.

  Aftermath

  Optichron’s capabilities were added to NetLogic’s broader communications-semiconductor portfolio.

  Acquisition consideration. $22 million (2011)

  Source

• 2011

  Agree to be acquired by BroadcomM&A

  Background

  Broadcom sought to strengthen its networking chipset business, while NetLogic had developed a substantial portfolio of infrastructure-processing technologies.

  Action taken

  NetLogic accepted Broadcom’s all-cash offer of approximately $3.7 billion, with shareholders to receive $50 per share.

  Aftermath

  The acquisition closed in February 2012, ending NetLogic’s independent public-company status and transferring its business into Broadcom.

  Acquisition value. $3.7 billion (Announced September 2011; completed February 2012)

  Source

• 2007

  Acquire AelurosM&A

  Background

  NetLogic sought to expand its interface-technology and semiconductor capabilities in support of high-speed networking applications.

  Action taken

  The company signed a definitive agreement to acquire privately held Aeluros.

  Aftermath

  The transaction broadened NetLogic’s technology portfolio before its later expansion into additional wireless and infrastructure products.

  Source

1. 1NetLogic Microsystemsen.wikipedia.org