IBM will purchase components for developing ASIC chips from Israeli start-up MystiCom. MystiCom's technology is designed for inclusion in a series of chips for IBM's high speed communications systems. MystiCom declined to disclose the volume of the deal, saying only that it amounted to "millions of dollars over a period of several years."
The component purchased is MystiCom's MystiPHY110, based on DSP-based architecture combined with advanced analog technology. Use of MystiPHY110 shortens development and integration time of components for computer communications on local networks and improves the network's performance. IBM will use MystiPHY110 for development and integration of ASIC chips for cable modems, ADSL networks, VoIP systems, network cards, switches, routers, and network communications infrastructure equipment.
ASI components are made to order chips adapted to a specific application for a customer (in contrast to standardized chips). Following the deal, every component ordered from IBM that requires Internet connectivity will include MystiCom's technology.
MystiCom CEO David Almagor said that MystiCom's totally unique solution facilitates both signal processing and analog capability. He also told "Globes": "We choose our customers carefully. We are currently in a position where we can choose our customers, and we prefer to work with the large ones." He further stated, "We had significant sales from practically the first day."
IBM vice-president for linear communications Christian King said that the company is looking for new technologies that can supplement its capabilities in the supply of communications components.
MystiCom operates in the field of chip design utilizing DSP and mixed-signal technologies for the data communications networks industry. The company operates according to a business model, under which it offers "building blocks" for high speed communications components, but does not manufacture and sell the components. MystiCom's customers include Texas Instruments, Philips Semiconductor, and Infineon Technologies (Siemens).
In March 2000 the company completed a $15 million financing round at a value of $90 million, after money. Participating in the round were the Chase Capital Partners funds, Cisco, Texas Instruments, and the Eucalyptus, Polaris, and Newbury Ventures venture capital funds.
MystiCom was founded in 1997 and employs a staff of 56, of which 51 are in Netanya and the remainder in San Francisco.
Published by Israel's Business Arena on June 21, 2000