Lucent's Microelectronics group is acquiring the products and key development teams of VTC, a semiconductor components supplier, for $100 million.
VTC, which designs semiconductor components for computer hard disk drive manufacturers, will also receive as much as an additional $50 million over two years as long as it meets certain performance requirements related to manufacturing.
The deal is expected to help boost Lucent's ability to provide data storage products for the Internet market, and the telecoms equipment giant will gain some 230 engineers and sales and marketing personnel, who have experience in analogue and mass storage technology.
Aaron Fisher, vice president of storage and analogue products at Lucent's microeletronics group, said: "Disk drive capacity is doubling every 12 months to store the vast amount of text, graphics, audio and images that zip across the Internet. We can now better support our customers' needs to boost storage capacity and operating performance while meeting intense price pressures."
The demand for extra storage capacity is being fuelled by new uses for disk drive technology in consumer electronics such as set top video recorders that use hard disks instead of video cassettes to record television programmes.
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