Cirrus Logic acquires MPEG-2 compression company

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

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.

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