Mountain View, Calif., November
20, 2008 – Cavium Networks (NASDAQ: CAVM),
a leading provider of semiconductor products that enable intelligent
processing for networking, communications, security and wireless
applications, today announced that it is has signed a definitive
agreement to acquire W&W Communications, Inc.. W&W
Communications is a fabless semiconductor company head-quartered
in Sunnyvale, CA with an offshore center in Beijing, China.
They are a specialist in market-leading low power, super low
latency and full-High Definition video processing solutions
with single and multi-stream capabilities. The purchase price
of the acquisition will be approximately $19.3 million, subject
to certain purchase price adjustments, and includes the retirement
of certain liabilities of W&W Communications. The acquisition
is expected to close in December 2008.
Video traffic over the Internet has been growing exponentially
and is forecasted to be over 90% of all consumer traffic
by 2012, according to Cisco’s Visual Networking Index
study. Currently, Internet video on the PC is the primary
driver of this growth. Moving forward, Internet delivery
of video to the TV followed by cost effective, High Definition
(HD) interactive video communications is expected to fuel
the future growth of video traffic over the Internet.
The digital video market consists of five distinct segments,
namely capture, process, transport, receive and display.
Today Cavium Networks’ single and multi-core processors
are used in a range of video transport applications. High
performance, video encode and decode capabilities are needed
in the capture, process and display market segments. High
end applications in these markets require encode and decode
with pristine video quality, super low latency, single and
multiple HD video stream processing up to 1080p at 60 frames/second
and beyond. These requirements today are primarily delivered
by multi-chip DSP based solutions. Low end requirements
which include decode only or encode of low resolution streams
are primarily delivered by ASIC based solutions.
W&W Communications’ unique video technology is
an excellent fit for high end video application requirements
where high-quality, super low latency and high channel density
are needed. W&W Communications provides a range of chips,
software and board level solutions for single and multi-channel,
High and Standard Definition H.264 applications at up to
full 1080p encode and decode at 60 frames per second.
“Pioneer Televisions and Multimedia equipment set
the standard for high-quality in the industry,” said
Junichi Shibata, Project Leader at Pioneer Home Entertainment
Business Group. “After testing a number of different
video codecs in our labs in Japan, we have determined that
W&W Communications’ H.264 video codec technology
is the best and only codec that meets our stringent quality
and low latency requirements.”
“Cavium Networks is a leader in intelligent processors
enabling next generation networks,” said Syed Ali,
President and CEO at Cavium Networks. “This acquisition
marks Cavium’s entry in to another high-growth market.
We see video processing as a key technology for a wide range
of next generation, high volume video enabled applications.
Combining high-quality, low latency video codec technology
with Cavium’s MIPS and ARM based processors will enable
Cavium to deliver compelling end to end solutions for the
entire digital video cycle.
We have been working with W&W Communications on joint
reference designs combining our processors along with their
video processors. We are highly excited about the prospects
of this technology based upon customer feedback that we
have received.”
W&W Communications proprietary, patent pending Super
Low Latency (SLL) Technology™ produces perceptual
lossless video quality and delivers the industry’s
lowest latency at sub-frame encode-decode delay. Other features
include a flexible encoder toolset with in-loop de-blocking
filter, single-pass bit rate control, content-adaptive noise
filtering, programmable cost functions for motion vector
and prediction mode coding, efficient search algorithms,
large search area, 1/2 and 1/4 pixel motion estimation interpolation
and error resiliency and concealment. The core technology
is based on a scalable parallel architecture, which is designed
to meet future higher resolution, quality and channel density
requirements, while providing low cost and power consumption
per stream. The current W&W Communications’ processor
provides a single chip solution for up to 4 HD, 8 SD and
32-CIF streams at full frame rate at dramatically lower
cost, power consumption and footprint over existing multi-chip
DSP implementations. W&W Communications’ processor
has recently been honored with the prestigious CES Innovations
2009 Design and Engineering Award in the category of Enabling
Technologies.
W&W Communications’ technology addresses a broad
range of applications in consumer, enterprise, service provider
and digital video surveillance markets. Consumer applications
include next generation media enabled home gateways and
media servers, wireless HD for TV, laptops and game consoles
and HD video capture for fixed and mobile applications.
Enterprise applications include high-quality Telepresence,
Video Conferencing, Video Surveillance, Video Telephony,
Tele-medicine and Distance Learning. Service provider applications
include multi-channel video transcoding and transrating
for Video on Demand and content distribution services.
“W&W Communications has developed compelling
video processor solutions and we have significant traction
with multiple Tier-1 vendors,” said Lars Herlitz,
President and CEO of W&W Communications. “We are
excited to be part of an exciting and dynamic company. We
look forward to accelerating our design win momentum significantly
by leveraging Cavium’s customer relationships, sales
channels and financial strength.”
Conference Call
Cavium Networks will broadcast a conference call today,
November 20, 2008, at 2:00 p.m. Pacific time (5:00 p.m.
Eastern time) to discuss more details regarding this acquisition.
The conference call will be available via a live web cast
on the investor relations section of the Cavium Networks
website at http://www.caviumnetworks.com.
Please access the website at least a few minutes prior to
the start of the call in order to download and install any
necessary audio software. An archived web cast replay of
the call will be available on the web site for a limited
period of time.
About Cavium Networks
Cavium Networks is a leading provider of highly integrated
semiconductor products that enable intelligent processing
in networking, communications, storage and security applications.
Cavium Networks offers a broad portfolio of integrated,
software compatible processors ranging in performance from
10 Mbps to 20 Gbps that enable secure, intelligent functionality
in enterprise, data-center, broadband/consumer and access
& service provider equipment. Cavium Networks processors
are supported by ecosystem partners that provide operating
systems, tool support, reference designs and other services.
Cavium Networks principal offices are in Mountain View,
CA with design team locations in California, Massachusetts
and India. For more information, please visit: http://www.caviumnetworks.com.
About W&W Communications, Inc.
W&W Communications is a fabless semiconductor company,
which develops best-in-class video compression solutions
for consumer, professional, enterprise and infrastructure
applications. The company is headquartered in Sunnyvale,
CA with an offshore center in Beijing, China.
