Exit: Broadcom purchases Israeli MagnaCom for $50 million
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Photo credit: MagnaCom

Photo credit: MagnaCom

Broadband communication giant Broadcom purchased Israeli startup MagnaCom, which develops 5th generation cellular communication technology, for $50 million

While most of us use 4th generation (4G) cellular technology, the technology world is abuzz with advanced development stages of the 5th generation. Israeli startup MagnaCom, which has created a modulation technology that may be the base for future cellular networks, was sold to the Singaporean chip conglomerate Broadcom for $50 million.

The base for 5G

The main technology MagnaCom develops is called WAM, which offers an alternative method of transferring information using a carrier wave, or what is called ‘modulation.’ The company’s solution enables cellular providers to benefit from better frequency ranges, broader bandwidth and lower power consumption, all while using existing infrastructure without having to erect new antennas.

The WAM technology may serve as the base for 5th generation networks, which are currently in advanced stages of specification and standardization. At the same time, the technology may be used for development of WiFi products, satellite communication, cable television, modems, etc. According to the company, using WAM will allow cellular companies to save billions of dollars on purchasing permits for using new frequencies, and will help them save energy. The company’s technology is based on over 15 approved patents and about 50 more in the process of approval, and if the development succeeds, it will become an alternative for the Quadrature Amplitude Modulation (QAM) technology that has been used for several decades.

MagnaCom was founded in 2012 by CEO Yossi Cohen, previously a senior executive at Motorola Mobility until Google purchased the company in 2012, and CTO Amir Eliaz, a former manager of ECI’s cellular division and the founder of another Broadcom acquisition, Provigent. MagnaCom has a research and development center in Petach Tikva, Israel, and offices in California. The company’s products have won various awards, including prizes from CES 2015. Since its establishment, the startup has raised several million dollars in capital, all from private investors and not from funds.

Broadcom was bought for $37 billion about a year ago by the Singaporean Avago, which merged both companies and took the name Broadcom for the consolidated company. This is the first purchase of the consolidated company in Israel, even though in the past, Broadcom has acquired more than 10 Israeli companies, including Dune Networks, Provigent in 2011, and SCSquare in that same year.

Video clip: Yossi Cohen, CEO of MagnaCom, explains how their technology works

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