Broadcom to Acquire Athena Semiconductors, Inc. for Mobile Digital TV Tuner and Low-Power Wi-Fi(R) Technologies

Acquisition Accelerates Broadcom Product Roadmap for Advanced Wireless Applications

IRVINE, Calif. and FREMONT, Calif., Oct. 6 /PRNewswire-FirstCall/ -- Broadcom Corporation (NASDAQ: BRCM), a global leader in wired and wireless broadband communications semiconductors, today announced that it has signed a definitive agreement to acquire Athena Semiconductors, Inc. Athena is a fabless semiconductor company that specializes in the design and development of mobile digital television tuner and low-power Wi-Fi(R) technology, two markets of interest to Broadcom. Industry analysts expect the market for low-power Wi-Fi chips to reach more than 104 million units per year by 2008, a compound annual growth rate (CAGR) of 121%(1), while mobile digital TV tuner chips should reach 81 million units by 2010(2), a CAGR of 205% over 5 years.

Mobile digital television (including DVB-H) and low power Wi-Fi technologies continue to be adopted by handset providers at an accelerating rate. Both technologies complement Broadcom's existing mobile and wireless product portfolio, which includes mobile multimedia (including audio, video and 3G graphics), Wi-Fi, Bluetooth(R), VoIP, and 2G/3G cellular baseband solutions. DVB-H allows mobile handset users to view real time transmissions of news, weather, sports, and other video content. DVB-H services are in field trials around the world today.

Historically, Wi-Fi chipsets have served the PC notebook and home networking market segments, neither of which is particularly power sensitive. In the future, Broadcom expects a new generation of Wi-Fi technology to be included in a range of mobile devices, including cellular handsets, personal media players and handheld video games, for which prolonged battery life is a primary design consideration. Embedded Wi-Fi technology will enable these products with faster Internet services and real time peer-to-peer connectivity. Low-power Wi-Fi devices, when combined with VoIP technology, will also provide a "voice over Wi-Fi" solution. This will enable both a new class of smart cordless phones (Wi-Fi phones) and "One-Phones," which combine the functionality of a Wi-Fi phone and a cellular phone into a single handset.

"Mobile television is a very exciting technology, and we expect that by combining Athena's DVB-H tuner with Broadcom's mobile multimedia technology for H.264 decoding, we will create the core of an industry-leading mobile digital TV chipset," said Robert Rango, Senior Vice President & General Manager of Broadcom's Mobile & Wireless Group. "In addition, Athena brings low-power Wi-Fi design capabilities and a seasoned engineering team with a proven track record whose expertise complements Broadcom's existing engineering resources."

Broadcom is a leading supplier of chips and system solutions for various wireless markets, including Wi-Fi, Bluetooth(R) and 2G & 3G cellular basebands. Cellular handsets that feature advanced multimedia capabilities can also take advantage of Broadcom's mobile multimedia processor technology, which enables new levels of clarity and power savings for mobile video applications. With a broad portfolio of wireless solutions and strong market positions in several of these segments, Broadcom is uniquely suited to provide all the pieces required by developers of next generation mobile devices.

"Athena's DVB-H technology complements Broadcom's mobile multimedia product line and our Wi-Fi experience will enable faster-time-to-market for key low-power Wi-Fi chips," said Pratap G. Reddy, President, Chief Operating Officer and Co-Founder of Athena Semiconductors. "We are looking forward to the opportunity to combine our resources with those of the existing Broadcom team to drive these key products to market."

Athena Semiconductors is headquartered in Fremont, California with highly experienced design teams in Bangalore, India and Athens, Greece. The group in India consists of 40 engineers, and the team in Greece consists of 23 engineers. The addition of the India team to Broadcom's workforce represents a key step in achieving the company's continuing goal of expanding its presence in India.

In connection with the acquisition, Broadcom expects to pay approximately $21.6 million in cash in exchange for all outstanding shares of Athena capital stock and other rights of Athena. A portion of the consideration payable to the stockholders of Athena will be placed into escrow pursuant to the terms of the acquisition agreement. The boards of directors of both companies have approved the merger. The merger transaction is expected to close during Broadcom's fourth fiscal quarter, which ends December 31. At closing, Broadcom may record a one-time charge for purchased in-process research and development expenses in its fourth fiscal quarter. The amount of that charge, if any, has not yet been determined.

About Athena Semiconductors

Athena Semiconductors is a fabless IC company specializing in CMOS radio transceiver IC products addressing rapidly growing wireless broadband communications and convergence markets delivering video, audio and data. Based on a distinguished patent-pending CMOS radio technology platform, Athena Semiconductors' products deliver a high level of integration, low cost and superior performance.

About Broadcom

Broadcom Corporation is a global leader in wired and wireless broadband communications semiconductors. Our products enable the convergence of high- speed data, high definition video, voice and audio at home, in the office and on the go. Broadcom provides manufacturers of computing and networking equipment, digital entertainment and broadband access products, and mobile devices with the industry's broadest portfolio of state-of-the-art system-on- a-chip and software solutions. These solutions support our core mission: Connecting everything(R).

Broadcom is one of the world's largest fabless semiconductor companies, with annual revenue of more than $2 billion. The company is headquartered in Irvine, Calif., with offices and research facilities in North America, Asia and Europe. Broadcom may be contacted at 1-949-450-8700 or at www.broadcom.com.

Safe Harbor Statement of Broadcom Corporation under the Private Securities Litigation Reform Act of 1995:

All statements included or incorporated by reference in this release, other than statements or characterizations of historical fact, are forward- looking statements. These forward-looking statements are based on our current expectations, estimates and projections about our industry and business, management's beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "may," "will," "should," "would," "could," "potential," "continue," "ongoing," similar expressions, and variations or negatives of these words. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement.

Important factors that may cause such a difference for Broadcom in connection with its planned acquisition of Athena Semiconductors, Inc. include, but are not limited to, the risks inherent in acquisitions of technologies and businesses, including the timing and successful completion of technology and product development through volume production, integration issues, costs and unanticipated expenditures, changing relationships with customers, suppliers and strategic partners, potential contractual, intellectual property or employment issues, accounting treatment and charges, and the risks that the acquisition cannot be completed successfully or that anticipated benefits are not realized; general economic and political conditions and specific conditions in the markets we address, including the volatility in the technology sector and semiconductor industry, trends in the broadband communications markets in various geographic regions, and possible disruption in commercial activities related to terrorist activity or armed conflict in the United States and other locations; the rate at which our present and future customers and end-users adopt Broadcom's and Athena's technologies and products in the markets for mobile communications devices; delays in the adoption and acceptance of industry standards in those markets; our ability to scale our operations in response to changes in demand for our existing products and services or demand for new products requested by our customers; intellectual property disputes and customer indemnification claims and other types of litigation risk; our ability to specify, develop or acquire, complete, introduce, market and transition to volume production new products and technologies in a cost-effective and timely manner; the timing, rescheduling or cancellation of significant customer orders and our ability, as well as the ability of our customers, to manage inventory; the gain or loss of a key customer, design win or order; the availability and pricing of third party semiconductor foundry, assembly and test capacity and raw materials; our ability to timely and accurately predict market requirements and evolving industry standards and to identify opportunities in new markets; the quality of our products and any remediation costs; our dependence on a few significant customers for a substantial portion of our revenue; our ability to develop new sources of revenue to replace lost revenue from our declining Intel processor- based server chipset business; competitive pressures and other factors such as the qualification, availability and pricing of competing products and technologies and the resulting effects on sales and pricing of our products; our ability to retain, recruit and hire key executives, technical personnel and other employees in the positions and numbers, with the experience and capabilities, and at the compensation levels needed to implement our business and product plans; problems or delays that we may face in shifting our products to smaller geometry process technologies and in achieving higher levels of design integration; the timing of customer-industry qualification and certification of our products and the risks of non-qualification or non- certification; changes in our product or customer mix; the volume of our product sales and pricing concessions on volume sales; fluctuations in the manufacturing yields of our third party semiconductor foundries and other problems or delays in the fabrication, assembly, testing or delivery of our products; the risks of producing products with new suppliers and at new fabrication and assembly facilities; the effectiveness of our expense and product cost control and reduction efforts; the risks and uncertainties associated with our international operations, particularly in light of recent events; the effects of natural disasters, public health emergencies, international conflicts and other events beyond our control; the level of orders received that can be shipped in a fiscal quarter; and other factors.

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