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Entropic Takes $55M Stab at Trident

Jeff Baumgartner
1/4/2012
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Multimedia over Coax Alliance (MoCA) specialist Entropic Communications Inc. (Nasdaq: ENTR) has filed a $55 million "stalking horse" cash bid to purchase the set-top system-on-chip (SoC) assets of bankrupt Trident Microsystems Inc. (Nasdaq: TRID). Entropic intends to expand its lineup of chipsets and place itself in more direct competition with Broadcom Corp. (Nasdaq: BRCM) and Intel Corp. (Nasdaq: INTC).

Trident, which filed for Chapter 11 bankruptcy protection Wednesday, makes a range of set-top box chips for satellite, terrestrial, cable and IPTV networks, as well as silicon for Docsis cable modems. The company has recently developed chips that power simple Digital Terminal Adapter (DTA) devices that cable operators are using to help support their analog spectrum reclamation efforts.

Entropic said it will hire 385 Trident employees based in China, India, the United Kingdom, Taiwan, Korea and the United States. In addition to set-top box products and its people, Entropic is also in line to pick up Trident's STB patents.

Trident posted a third-quarter net loss of $39.1 million, or 22 cents a share, on revenues of $80.1 million. Trident's been operating in the red, but it's been able to sign on several big companies as customers, including Cisco Systems Inc. (Nasdaq: CSCO), Samsung Corp. and Sony Corp. (NYSE: SNE).

Why this matters
If completed, the purchase looks to expand Entropic's product line and market opportunities well beyond MoCA chips and scale its business to compete with larger set-top and cable modem silicon makers such as Broadcom and Intel.

For troubled Trident, the deal would help it unload its STB business as it explores strategic alternatives for its remaining business units. It has already struck a deal with RDA Technologies, which has obtained a non-exclusive license for Trident's SX-5 SoC for televisions for an upfront fee of $7.5 million, with an additional $8.5 million to be paid "in the near term."

For more



— Jeff Baumgartner, Site Editor, Light Reading Cable

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msilbey
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msilbey,
 User Rank: Blogger
12/5/2012 | 5:46:43 PM
re: Entropic Takes $55M Stab at Trident


Lots of SoC news. Entropic wants in the game, Broadcom's licensing Sling tech for its SoC, and Sigma just announced a new set-top reference design with Quantenna for Wi-Fi video delivery. Apparently people aren't counting out set-tops just yet. 

Pete Baldwin
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Pete Baldwin,
 User Rank: Light Beer
12/5/2012 | 5:46:42 PM
re: Entropic Takes $55M Stab at Trident


I'd lost track of Trident a long time ago.  Didn't they do graphics chips, way way back when?  I'm thinking around 1998, when graphics accelerators were a hot item, before Intel integrated that function and wiped out most of the sector...

geminiz
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geminiz,
 User Rank: Light Beer
12/5/2012 | 5:46:41 PM
re: Entropic Takes $55M Stab at Trident


Trident once upon a time was a tier2 player in the graphic processor business. When the industry transitioned to 3D acceleration, Trident made several unsuccessful attempts with their Blade3d series. Shortly after, Via Technologies from Taiwan licensed Trident's graphic capability for its IGP on its chipset. Eventually the two parties went south with Trident suing Via for patent infringement and Via ended up buying out Trident's graphic business. After selling its core graphic business, Trident went to focus on STB chips and we all know what happened thereafter.

ymchu
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ymchu,
 User Rank: Light Beer
12/5/2012 | 5:46:33 PM
re: Entropic Takes $55M Stab at Trident


They are still No. 3 in STB although distant 3rd

Jeff Baumgartner
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Jeff Baumgartner,
 User Rank: Light Sabre
12/5/2012 | 5:41:19 PM
re: Entropic Takes $55M Stab at Trident


And don't expect Entropic to make much of a run at the Docsis 3.0 chip market led by Broadcom and Intel (via TI acquisition).  When they first struck the deal in January they were pretty clear that a D3 chip roadmap wouldn't be in the near-term, but that they'd continue to make the Docsis 2.0 assets that Trident had that goes all the way back to Conexant. JB


 
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