Restructuring could cost US chip tech firm Ceva up to $9 million (€7.3 million) in the fourth quarter, writes Kevin Allison.

The firm, which merged with Irish group Parthus last year and has research facilities in Ireland, said yesterday it would incur the costs as part of a planned realignment of its core business to focus on digital signal processing (DSP).

Ceva managers were cautiously optimistic that the firm's re-orientation toward the high-growth DSP market would lead to profitability in 2004.

"We have eliminated some non-strategic products and realigned business structures, resulting in a more cost-efficient organisation," said Ceva chief executive officer Chet Silvestri.

"With these changes, we are confident we can acheive our corporate goals of growth, profitability and leadership in DSP."

In a conference call with investors yesterday, Ceva said its fourth quarter revenues could be up to $500,000 higher than the $9.3 million previously expected.

DSP technology helps power mobile telephone handsets and other digital devices.

It is one of the fastest-growing markets in the semiconductor industry.

CEVA chief financial officer Christine Russell said she expected the firm's DSP business to grow 20 per cent in 2004.

The firm announced yesterday that Broadcom, a leading broadband technology provider, had agreed to use CEVA's TeakLite DSP technology to power its latest mobile telphone chip.

Chip manufacturers must pay a license fee to use CEVA technolgy. They also pay a royalty on each shipment of chips that use the technology.