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The semiconductor designer said on Friday that it intends to stop investing in Radio Frequency (RF) and hardware-based security acceleration products and technologies, primarily because these areas represent only a small portion of its revenues. The decision is also based on the fact that Parthus has more expertise and market leadership in other technologies, the company said.
As a result, a limited number of Parthus employees could be offered voluntary redundancy, while others will be redeployed within the company. Parthus' RF Division employs around 45 and the company's hardware-based security acceleration unit has approximately 20 workers.
Full details in terms of job losses and redeployments will be announced in Parthus' third quarter results. The business also said that the anticipated workforce reduction and the related costs would result in a once-off restructuring charge during the third quarter of around USD3 million.
"There are simply other areas where we have more leadership; areas where we have higher expectations for growth," said a spokesperson for the company. The company's focus will now be entirely on intellectual property development for DSP and Application Processing, Mixed-Signal and Wireline Communications and Wireless Communications generally, the spokesperson said.
"Parthus believes that it is important to take these measures now, so that we can focus our corporate resources in those technologies that position Parthus to meet the needs of our customers and to continue to compete effectively in the marketplace either independently, or as part of the combined ParthusCeva enterprise..." said Kevin Fielding, president of Parthus, in a statement.
To that end, the company also set a date for its EGM, when shareholders will vote on the proposed merger with Ceva, a division of the DSP Group of Israel. The EGM will take place on 26 September, and if approved the merger is expected to be completed by the end of October. The formal documentation regarding the scheme, including a Parthus shareholder circular, will be distributed during the first week of September 2002.
Additionally, Parthus, DSP Group and Ceva announced that the terms of the merger have been amended to eliminate the payment of an aggregate of USD100,000 to Parthus shareholders. However, the bulk of the agreement remains the same, including the proposed repayment of USD60 million to Parthus shareholders.
Once the merger is completed, DSP Group shareholders will own just over 50 percent of the new firm, to be called ParthusCeva. Parthus employees will constitute some 360 of the 400-person workforce of ParthusCeva, and the company will officially be headquartered in San Jose, California, although Ireland will remain a prominent base, where the bulk of its management will remain.
Eli Ayalon, who is currently chairman and chief executive officer of DSPG, will become the chairman of ParthusCeva, and Parthus chief executive officer Brian Long will become the vice-chairman. Parthus president Kevin Fielding is set to be ParthusCeva's chief executive officer and a board member, while Parthus chief financial officer Elaine Coughlan will hold the same position in the new company.
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