Tuesday, December 11, 2007

STM sees DTV, DisplayPort at its Genesis

Good timing for STMicro today, offering to snap up Genesis MicroChip for an estimated $336 million. The industry is on a significant ramp in LCD TVs and digital TVs, as well as the DisplayPort interface Genesis helped pioneer that will appear inside many of those devices. The acquisition will help STM grab a bigger share of the growing market.

Long term the duo will have some nice integration plays, and STM could use Genesis' DisplayPort technology to expand its business in PCs. In the short term, STM may see an opportunity to reduce some redundant costs and make the Genesis parts even more profitable. But even without cuts, this is a good deal. Genesis reported sales of $191 million in the past year, has top-drawer customers such as Dell and Samsung and a nice pile of some 210 patents.

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