Speedy Oz chips attract big bucks

An Australian computer chip company, founded three years ago by two Macquarie University researchers in Sydney, was bought by US technology giant Cisco for $295 million (£207 million) last week.

David Skellern and Neil Weste set up Radiata in 1997 to develop computer chips for the wireless technology market. Now they and a staff of 53 will share the fortune from the takeover.

Cisco has bought the company to gain access to a microchip that allows connection to the internet at high speeds without cables. The chipset overcomes the slow data transmission that has troubled the wireless sector, and it even allows video to be transmitted.

The microchip was developed in conjunction with the Commonwealth Scientific and Industrial Research Organisation - Australia's largest government-owned research organisation.

As the patent holders, Macquarie University and the CSIRO will receive royalty payments.

The buyout was criticised by Australia's venture capital industry, which accused the Macquarie researchers of "selling off the Australian farm".

But a Radiata spokesman said Cisco was committed to keeping the engineering team in Australia.