The shards of chip startup Ample Communications Inc. are ending up in the hands of Mindspeed Technologies Inc. (Nasdaq: MSPD).

Mindspeed announced today it has agreed to acquire Ample's intellectual property and product portfolio for $4.6 million cash. It's a foreclosure deal, with the money going to Ample's senior creditor. (See Mindspeed Gets Ample.)

Mindspeed expects to close the deal this month.

Ample had gone dormant last month, according to several industry sources. Word at the time was that Ample was on the verge of a sale, probably to a public company. (See Ample Gets Trampled.)

Ample raised at least $62 million and once made Light Reading's Top 10 Private Companies list (alongside Iolon and Velio -- yeah, yeah, the 2002 list wasn't our high point).

Mindspeed expects revenues of $3 million from Ample's wares in fiscal 2008, so it's not exactly a life-changing event. (Mindspeed's third-quarter revenues were $33.2 million -- see Mindspeed Reports Q3.)

But Ample would give Mindspeed a foot in the door with Ethernet. Mindspeed's portfolio includes chips for Sonet/SDH and T1/E1 networks, as well as VOIP and DSL offerings and some upcoming GPON parts. (See Mindspeed Joins GPON Race.) But no Ethernet.

Ample has devices going as slow as 10 Mbit/s, but its calling card had been the higher-speed parts, up to 10 Gbit/s, that caught the eye of customers including Force10 Networks Inc. "What it looks like they're doing is buying bleeding-edge as an entry into the market," says Tim Kellis, an analyst with Stanford Financial Group .

Mindspeed acknowledges that it saw a quick "in" with the Ethernet aggregation market. The company's focus has been on high-growth areas like VOIP, but its older WAN business, consisting of chips for Sonet/SDH and T1/E1 networks, still makes up 40 percent of revenues. Mindspeed thinks it's time to extend that franchise into Ethernet.

The hope is that Mindspeed, being a bigger company with established ties to OEMs, will be able to snare the customers that wouldn't consider Ample. "We think there's an untapped market for these products with the companies we have existing relationships with," a Mindspeed spokesman says.

But Kellis notes that Ample by itself doesn't constitute a full Ethernet strategy. And Mindspeed admits it doesn't have many ways to combine Ethernet with the rest of its WAN portfolio. "I'm not sure we necessarily see a ton of synergy with those other products," the spokesman says.

Mindspeed does plan to use Ample's technology to develop further products, he adds.

— Craig Matsumoto, West Coast Editor, Light Reading