Intel Pays $1.4B for Infineon's Wireless Solutions Business

Chip maker says acquisition deepens wireless portfolio, gains position in mobile handheld devices market. Unit will operate as standalone business.

August 31, 2010

D.H. Kass

: More stories by this author:

Intel Corp. said it will plunk down $1.4 billion to purchase Infineon Technologies AG’s Wireless Solutions Business (WLS) and use the acquired technology in its laptops and a variety of devices including smartphones, netbook, tablets and embedded computers.

The companies said that Intel’s board of directors and Infineon’s supervisory and management boards have approved the transaction. Infineon is headquartered in Neubiberg, Germany and maintains U.S. offices in Milpitas, CA. The deal is expected to close in the first quarter of 2011.

The purchase comes only two weeks after Intel bought security vendor McAfee Inc. for some $7.7 billion, the largest acquisition in its 42-year history, and amid the company's disclosure that its third quarter revenue will fall short of expectations owing to weak demand for consumer PCs.

Intel said that the acquisition immediately expands its current Wi-Fi and WiMax offerings with Infineon’s 3G capabilities and also support its plan to accelerate LTE next generation mobile wireless broadband technology.

With the WLS acquisition, Intel gets baseband processors, radio-frequency transceivers, power management integrated circuits (ICs), additional connectivity features, single-chip solutions and the corresponding system software.

Although upwards of 80 percent of PCs are driven by Intel processors, the vendor is a noticeable non-player in the emerging smartphones market, primarily owing to its power-hungry chipsets, which are largely inappropriate for the mobile devices. The vendor said that pairing WLS’ cellular technology with its core strengths will enable it to deliver the low-power platforms it has lacked.

Intel said that the WLS unit will operate as a standalone business. The chip maker said that it will support WLS’s existing customers, including ARM Holdings Plc processor-based platforms. ARM, which licenses microprocessor designs, offers chips favored by mobile product makers because they typically use less power and extend battery life.

The WLS unit accounts for about 917 million Euro, or $1.2 billion, annually, approximately 30 percent of the 3.03 billion Euro, or $3.9 billion, Infineon posted in its most recent fiscal year.

“The global demand for wireless solutions continues to grow at an extraordinary rate,” said Paul Otellini, Intel president and chief executive.

“As more devices compute and connect to the Internet, we are committed to making certain that Intel is well positioned to take advantage of the growth potential in every computing segment, from laptops to handhelds,” he said.

Infineon officials said that the transaction frees it to concentrate on markets in which it is a stronger player.

“The sale of WLS is a strategic decision to enhance Infineon’s value,” said Peter Bauer, Infineon chief executive.

“We can now fully concentrate our resources towards strong growth in our core segments Automotive (ATV), Industrial & Multimarket (IMM) and Chip Card & Security (CCS),” he said.

“This creates a great perspective for all Infineon customers, employees and shareholders. We all stand to benefit enormously from this deal,” he said.

TAGS: wireless,mobile,Intel,smartphone,Infineon

Business News Solutions

Comment and Contribute

    (Maximum characters: 1200). You have 1200 characters left.



    Channel News| Contact D.H. Kass | Back to top

    Click the Join button below to sign up to our newsletter!