Chip maker Cirrus Logic Inc. announced it will acquire Stream Machine Co., makers of MPEG-2 video recording system-on-chips, for $110 million in stock.

Cirrus, which makes analog and digital signal processor (DSP) chips for consumer electronics devices, will use Stream Machine's encoding technology in future consumer entertainment devices, the company said in a statement. The acquisition is the fourth Cirrus has announced in five months, including its purchase of audio and video compression and decompression company LuxSonor Semiconductors Inc. last month.

MPEG-2 encoder chips are used in devices such as personal video recorders, digital video cameras and DVD (digital versatile disc) recorders. Stream Machine's video compression technology also allows more content to be stored on the hard drives of set-top boxes without sacrificing quality, both improving storage capacity for consumers and lowering costs for set-top-box manufacturers and cable operators, Cirrus said. The compression also reduces bandwidth constraints when streaming video over a home network, the company said.

The acquisition has been approved by the boards of directors of both companies, and is expected to close in October, following standard regulatory approval.

Cirrus Logic, in Austin, Texas, can be reached at +1-512-445-7222, or on the Web at http://www.cirruslogic.com/. Stream Machine, in Milpitas, California, can be reached at +1-408-435-9166, or on the Web at http://www.streammachine.com/.

» posted by abennett

IDG News Service

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