SANTA CLARA, Calif. and ALAMEDA, Calif. -- Dec. 21, 2005 -- UTStarcom, Inc. (Nasdaq: UTSI), a global leader in IP-based, end-to-end networking solutions and services, and Marvell(R) (Nasdaq: MRVL), the leader in development of storage, communications, and consumer silicon solutions, today announced a definitive agreement for Marvell to purchase substantially all of the assets of UTStarcom's semiconductor design business division, including the assets related to UTStarcom's acquisition of Advanced Communications Devices Corporation in December 2001.
UTStarcom's semiconductor design business is primarily focused on developing wireless communications solutions including 3G wireless application technologies and silicon solutions for Personal Handyphone System (PHS) products.
"We are very pleased to enter into this agreement and look forward to further strengthening our relationship with UTStarcom," stated Dr. Sehat Sutardja, Marvell's president and chief executive officer. "Additionally, we are very excited to have this strong engineering team join the Marvell family as well as greatly expand our growing operations in China."
Under the terms of the definitive agreement, Marvell will purchase substantially all of the assets of UTStarcom's System-on-Chip semiconductor business division for $24 million in cash. The acquisition is expected to close within sixty days following the satisfaction of regulatory requirements and other customary closing conditions. Additionally, in accordance with the definitive agreement, Marvell may pay an additional $16 million upon certain defined milestones being achieved. Upon closing, Marvell may record a one-time charge for purchased in-process research and development expenses. The amount of that charge, if any, has not yet been determined.
"This divestiture is consistent with the corporate restructuring plan announced earlier this year which is focused on streamlining our business to our strategic handset and system level core competencies and better aligning the company's resources with industry trends and sales opportunities in the marketplace," said Hong Lu, chief executive officer and president of UTStarcom, Inc. "We believe that this transaction will allow us to maintain the cost benefits enabled by our internal development of ASIC chip design by leveraging the proven semiconductor capabilities of Marvell."
About UTStarcom
UTStarcom is a global leader in IP-based, end-to-end networking solutions and international service and support. The company sells its broadband, wireless, and handset solutions to operators in both emerging and established telecommunications markets around the world. UTStarcom enables its customers to rapidly deploy revenue-generating access services using their existing infrastructure, while providing a migration path to cost-efficient, end-to-end IP networks. Founded in 1991 and headquartered in Alameda, California, the company has research and design operations in the United States, China, Korea and India. UTStarcom is a FORTUNE 1000 company. For more information about UTStarcom, visit the company's Web site at http://www.utstar.com.
About Marvell
Marvell is the leader in development of storage, communications and consumer silicon solutions. The Company's diverse product portfolio includes switching, transceiver, communications controller, wireless, and storage solutions that power the entire communications infrastructure, including enterprise, metro, home, and storage networking. As used in this release, the terms "Company" and "Marvell" refer to Marvell Technology Group Ltd. and its subsidiaries, including Marvell Semiconductor, Inc. (MSI), Marvell Asia Pte Ltd (MAPL), Marvell Japan K.K., Marvell Taiwan Ltd., Marvell International Ltd. (MIL), Marvell U.K. Limited, Marvell Semiconductor Israel Ltd. (MSIL), RADLAN Computer Communications Ltd., and SysKonnect GmbH. MSI is headquartered in Sunnyvale, Calif., and designs, develops and markets products on behalf of MIL and MAPL. MSI may be contacted at 408-222-2500 or at http://www.marvell.com.