Netanya-based startup MystiCom, a chip architecture specialist for the communication industry, today announced it was restructuring its business model. The company, which so far sold licenses for the manufacture of its solutions to companies such as Texas Instruments (NYSE:TXN), the IBM Corporation (NYSE:IBM) and Infineon Technologies, will begin to manufacture them on its own.
In October 2001 MystiCom raised $28 million. The company says it will use the funds to complete its switch from owning copyrights to actually manufacturing chips while completing its sales, marketing, operating and engineering infrastructures. MystiCom CEO Dr. David Almagor, said the production would be in a fabless format. A Taiwanese chip manufacturer will do the work, while MystiCom will market the chips under its own name.
Restructuring the business model, said Almagor, will help the company compete against giants such as Broadcom (Nasdaq:BRCM) and the Marvell Technology Group (Nasdaq:MRVL), which already have multi-gigabit speed products.
The company said it plans to float its shares, but CEO Almagor says, "It's important to remember that an IPO is a milestone, not a goal. We will issue when both the company and the market are ready."
As far as a possible merger and acquisition, Almagor says that a company designed for an acquisition focuses on one product, and keeps its circle of clients to a minimum. "MystiCom has a whole product line and a pool of customers. The company was not intended for an acquisition, and an issue seems a lot more likely."
MystiCom has 75 workers in its R&D center in Netanya and 10 workers in its California branch. Almagor said the company was planning to expand its activity in the U.S., and to increase its workforce there to 100 workers.
He did not dismiss the possibility the company may hire an American CEO for its overseas operation.
David Almagor, Israel Greiss, Eyal Eshed, Amir Bar Niv, and Rich Seifert, considered the inventor of Ethernet technology, founded MystiCom in 1997.