ATI is fleshing out its set-top portfolio with the $20m cash purchase of niche chipset designer NxTWave Communications.

The acquisition will help ATI build "highly integrated chipsets to set-top customers providing lower cost and greater functionality". To be specific NxTWave will provide the demodulation technology in the front end communications, combining with ATI's back end XILLEON, an integrated MIPS-based CPU.

NxTWave will bring 55 staff - 50 engineers - on board, and additional expenses of $8m a year. The acquisition which is expected to close 28 June is 'mildly dilutive' for ATI's Q4, but is expected to be accretive thereafter.

ATI has also announced a set-top design win for the XILLEON 220 with Scientific Atlanta, which is to incorporate the chip into Explorer set-tops. ®

ATI NXTWave press release