In a move that has been rumored to happen over the last few days, Infineon Technologies AG and Intel Corporation have entered into a definitive agreement to transfer Infineon’s Wireless Solutions (WLS) business to Intel in a cash transaction valued at approximately $1.4 billion.
Intel has been on a shopping spree of late. Earlier this month Intel entered into a deal to buy security software vendor McAfee for $7.68 billion. Intel also has a deal in the works to acquire the cable modem unit of Texas Instruments for an undisclosed sum.
WLS, a leading provider of cellular platforms to top tier global phone makers, will operate as a standalone business serving its existing customers. WLS will also contribute to Intel’s strategy to make connected computing ubiquitous from smartphones to laptops to embedded computing. The Funny thing is back in 2006 Intel sold some of its communication chips to Marvell. But Intel wants to get the ATom into the Smart phone game and that requires being offer more than just CPU to hand set makers, but complete IC sets. Buying Infineon is just another step to Atom into the phone space. Back in July, Intel hired, Mike Bell, Palm’s former Senior VP of Product Development, to the post of Director of Smartphone Product Development.
The Germany-based company is a major supplier to Apple, Nokia, Samsung, and others. Teardown sites show that Infineon silicon plays an important role in the iPad and iPhone 4.
“The global demand for wireless solutions continues to grow at an extraordinary rate,” said Paul Otellini, Intel president and CEO. “The acquisition of Infineon’s WLS business strengthens the second pillar of our computing strategy — Internet connectivity — and enables us to offer a portfolio of products that covers the full range of wireless options from Wi-Fi and 3G to WiMAX and LTE. As more devices compute and connect to the Internet, we are committed to positioning Intel to take advantage of the growth potential in every computing segment, from laptops to handhelds and beyond.”
Intel’s goal is to expand its mobile and embedded product offerings to support additional customers and market segments, including smartphones, tablets, netbooks, notebooks and embedded computing devices. Through this effort, Intel will pair WLS’ best-in-class cellular technology with its core strengths to enable the delivery of low-power, Intel-based platforms that combine its applications processor with an expanded portfolio of wireless options — bringing together Intel’s leadership in Wi-Fi and WiMAX with WLS’ leadership in 2G and 3G, and a combined path to accelerate 4G LTE.
Intel expects WLS to continue growing, and remaining a standalone business to ensure continuity of existing customer sales, projects and support. The business will continue to support its customers with the best solutions possible, including ARM-based products as well as Intel-based application processor platforms with leading-edge 3G slim modem solutions.
Processors, radio-frequency transceivers, power management integrated circuits (ICs), additional connectivity features, single-chip solutions as well as the corresponding system software. This helps to enable the smooth transmission of voice and high-speed data from the backbone of the telecommunication network to the end user’s device. With annual revenue of Euro 917 million, WLS was approximately 30 percent of Infineon’s total annual revenue of Euro 3.03 billion in the past financial year.
The board of directors of Intel and the supervisory board and the management board of Infineon have approved the transaction. It is expected to close in the first quarter of 2011, subject to certain regulatory approvals and other customary closing conditions specified in the definitive agreement.
