Wireless-solution developer Atheros Communications this week announced an agreement to pay $71.5 million to buy Attansic Technology, a Taiwan-based fabless semiconductor company that specializes in Fast Ethernet and Gigabit Ethernet solutions.

Already well known for its wireless LAN processors, Atheros decided to acquire Attansic in an effort to integrate Gigabit Ethernet connectivity into its solutions for PC, access-point and router solutions targeting the consumer and small office/home office markets, said Todd Antes, Atheros’ vice president of marketing.
Currently, Gigabit Ethernet connections are expensive additions to wireless chipsets, but Atheros hopes to develop a comprehensive, high-speed solution that can be sold for less that $100 retail.

“Now that we have this technology in our toolkit, we’ll be able to drive the total solution cost to a point where it will be very compelling for people to put Gigabit Ethernet into all their 802.11 products,” Antes said.

Having the ability to offer such an integrated solution is a wise strategic move, according to Craig Mathias, a principal at the wireless and mobile advisory firm Farpoint Group.

"By 2008, 100 percent of 802.11n wireless routers and access points will ship with Gigabit Ethernet ports in order to achieve the technology's full performance potential," Mathias said in a prepared statement. "Atheros is primed to take advantage of this tremendous market opportunity by offering a complete, cost-optimized networking solution to its impressive, existing SOHO customer base."

Under the terms of the deal, Atheros expects to pay $46.5 million in cash and $25 million in Atheros common stock for privately held Attansic. The transaction is expected to close at the end of the year, Antes said.

Atheros decided to buy Attansic because it believes the Taiwan-based company has the most cost-effective Gigabit Ethernet products on the market, Antes said.