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Micrel to Acquire Kendin for $215 Million in Stock, Expanding into Ethernet Chips

By TheFinanceBase Team4 min read
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Micrel announced in San Jose on May 4, 2001, that it would acquire Sunnyvale, California-based Kendin Communications in a stock transaction valued at $215 million. The strategic aim was to add Ethernet physical-layer (PHY) and switching products—from Fast Ethernet through Gigabit and 10 Gigabit Ethernet—to Micrel’s established analog and mixed-signal business.

What Micrel announced

The announcement identified Micrel Inc. as the buyer and Kendin Communications Inc. as the target. Micrel put the announced consideration at $215 million in Micrel stock. The available contemporaneous account does not state an exchange ratio, the number of shares to be issued, shareholder-approval requirements, closing conditions, or accounting treatment. It therefore supports the announcement and its stated value, not a complete reconstruction of the transaction mechanics.

EE Times reported the announcement on May 4, 2001, in its account “Micrel acquires communications chip maker Kendin.”

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What Kendin brought to Micrel

Ethernet PHY and switching silicon

Kendin developed chips for Ethernet physical-layer functions and switching. The product scope cited in the announcement covered three speed tiers:

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10 Gigabit Ethernet PHY and switch chips aimed at the emerging high-speed market

This gave Micrel an immediate route into networking silicon rather than requiring it to develop an entire Ethernet product family internally.

Kendin’s architecture claim

Kendin described its PHY and switching devices as using an algorithmic signal-processing architecture. The company positioned that approach against competing digital-signal-processing (DSP) designs and associated it with lower power consumption, smaller die size, and greater integration. Those are technology-positioning claims reported at the time, not independently measured results established by the announcement; no power figures, process node, port counts, throughput, latency, or die-size measurements were provided.

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Why the deal fit Micrel’s strategy

Adding networking to an analog and mixed-signal base

Micrel’s existing portfolio included USB integrated circuits, low-dropout (LDO) regulators, PCMCIA power controllers, switch-mode power-supply chips, MOSFET drivers, and related analog and mixed-signal products. Kendin’s Ethernet devices were presented as complementary to that base rather than as a duplication of it.

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Broadening communications exposure

Micrel was also pursuing wide-area-networking opportunities, including chips for SONET/SDH and related applications. Kendin’s Ethernet line therefore fit a broader communications strategy that extended from network transport and access functions toward local-area-network connectivity.

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The clearest strategic reading is acceleration: buying Kendin offered an established set of communications products and engineering technology, potentially shortening Micrel’s path into Ethernet markets compared with building the capability solely through organic development. That is an inference from the announced rationale, not evidence that post-deal synergies were achieved.

Competitive context in 2001

The Ethernet PHY and switch-chip markets were described as growing and highly competitive. Companies named in the contemporaneous coverage included Broadcom, Infineon, Intel, and Marvell, along with other semiconductor suppliers. The announcement did not provide market-share data, customer lists, design-win evidence, product benchmarks, or a like-for-like comparison among those companies. Their inclusion should therefore be read as context, not as proof that each vendor competed with Kendin across every product category.

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What the announcement does—and does not—establish

Established by the contemporaneous account

  • The announcement date was May 4, 2001, in San Jose.
  • Micrel named Kendin Communications of Sunnyvale, California, as the company it planned to acquire.
  • The announced consideration was $215 million in Micrel stock.
  • Kendin’s cited markets included Fast Ethernet, Gigabit Ethernet, and 10 Gigabit Ethernet PHY and switch chips.
  • Kendin described an algorithmic signal-processing architecture and associated it with lower power, smaller die, and greater integration than DSP-based alternatives.
  • Micrel’s existing businesses included the analog, power-management, USB, and related products listed above, as well as SONET/SDH communications activity.

Not established by that account

  • The final closing date, exchange ratio, shares issued, conditions, approvals, or accounting treatment.
  • Kendin’s revenue, profitability, valuation multiple, customer base, production status, or design wins.
  • Whether Micrel retained Kendin personnel, facilities, or branding, or how products were integrated, rebranded, or discontinued.
  • Measured power, die-size, performance, or standards-compliance advantages over competitors.
  • Long-term revenue contribution, market share, shareholder returns, or whether the transaction ultimately succeeded commercially.
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Risks Micrel would have had to manage

  • Integration: Combining Kendin’s engineering and sales organization with Micrel’s existing operations could affect execution and staff retention.
  • Competitive pressure: Larger or better-established networking-chip suppliers could compress prices and make design wins difficult.
  • Technology and standards timing: Ethernet standards, customer architectures, and network spending could change faster than product plans.
  • Distribution and customer fit: Networking-chip customers and channels could differ substantially from those of Micrel’s traditional analog businesses.
  • Stock consideration: Issuing Micrel shares could dilute existing shareholders, while the dollar value of the consideration would be sensitive to Micrel’s share price.

Historical significance

At $215 million in stock, the Kendin transaction was a substantial portfolio move for Micrel: it paired an established analog and mixed-signal supplier with Ethernet connectivity technology spanning multiple speed generations, including 10 Gigabit Ethernet. It illustrates a common semiconductor strategy of using acquisition to obtain market access and specialized engineering more quickly than an internal development program might allow.

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The available May 2001 announcement is sufficient to explain the deal’s intent and technical scope, but not to score its eventual outcome. Any claim about a successful closing, realized synergies, product-line performance, or shareholder value requires later company filings, annual reports, product announcements, or other post-deal evidence.

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  • PLUG-AND-PLAY UNMANAGED NETWORK SWITCH: Simple plug-and-play setup with no software to install or configuration required.
  • FLEXIBLE MOUNTING OPTIONS: Compact metal design supports desktop or wall-mount placement for versatile installation.
  • SILENT & ENERGY-EFFICIENT OPERATION: Fanless design ensures silent performance, while IEEE 802.3az Energy Efficient Ethernet reduces power consumption without compromising high-speed network performance.
  • REGIONAL COMPATIBILITY: Made for use in U.S. & CA only

Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.

Written by TheFinanceBase Team

The Team behind TheFinanceBase.

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