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STMicrolectronics takes on Adaptec chippies

Pays $73 million for the privilege

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Adaptec has completed another step in its reorganisation with the disposal of its storage chip design team to STMicroelctronics. STMicroelectronics will pay around $73 million cash for Adaptec’s Peripherals Technology Solutions (PTS) Division. The company will take on the PTS team, along with the PTS “product portfolio, intellectual property and patents, license know-how related to disk controllers, interfaces and read-channel technology, and purchase certain fixed assets”. This technology will enable ST to drive forward what it dubs the “super-integration of the read-write channel and disk controller”. Throughout 1998, Adaptec has slashed headcounts and hived off non-core technollogies, in an attempt to boost profits. It will concentrate on its key strengths in SCSI adapters and RAID controllers. It also thinks there is an opportunity in Storage Area Networking (SAN), a new technology that manages to be at the same time hugely lucrative and deeply dull. Adaptec effectively threw in the towel on semiconductor design , following the FTC- inspired collapse of the company’s proposed takeover of Symbios from Hyundai in June. Lacking economies of scale, the company was finding it increasingly difficult to justify the capital expenditure needed to stay in the game. Also, many customers in the hard disk drive manufacturing sector had grown to the point where they were designing their own silicon, Adaptec interim CEO Larry Boucher told US news wires. Adaptec is the second storage vendor in recent weeks to divest its semiconductor activities. Seagate Technology last month announced its intention to shut down its chips for disk drives facility in Scotland with the loss of more than 200 jobs, after failing to find a buyer.®

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