Following weeks of speculation, MaxLinear has emerged as the buyer for Intel Corp.'s Home Gateway Platform Division, a unit that makes a range of chipsets for Wi-Fi access points and Ethernet and home gateway products, including DOCSIS modems.
Under terms of the deal, MaxLinear will acquire the unit for $150 million in cash, and expects the deal to add about $60 million to $70 million in quarterly revenue.
MaxLinear today lowered its preliminary Q1 2020 revenue forecast to $61.75 million to $62.25, down from $65 million to $70 million, citing the impact of COVID-19 on supply constraints and push-out requests from certain customers.
MaxLinear and Intel expect to close the deal in the third quarter of 2020. MaxLinear believes the acquisition will add more scale to its business as it will essentially double its serviceable addressable market, while also enabling it to round out its cable technology portfolio and play a big role in the emerging market for Wi-Fi 6 products.
Why this matters
The announcement ends months of speculation regarding the fate of Intel's home connectivity unit, which has been on the block for months. Industry sources familiar with the process said MaxLinear, a long-time partner of Intel's for DOCSIS-powered modems and gateways, was the most logical candidate to acquire this particular piece of Intel. Intel had also held M&A talks for the unit with Qualcomm and MediaTek, according to a source.
Further, the deal ensures there will be multiple suppliers of DOCSIS silicon for the foreseeable future, while also setting up MaxLinear as the primary competitor for Broadcom in the DOCSIS silicon sector.
MaxLinear is also expanding its presence in cable consumer premises equipment (CPE) as the industry gets ready to push ahead with DOCSIS 4.0, a new set of CableLabs specs that will enable faster speeds and lower latency capabilities on cable's widely deployed hybrid fiber/coax (HFC) networks. Intel, which unloaded its smartphone modem business to Apple last summer for about $1 billion, got into the DOCSIS silicon market in August 2010 via the acquisition of Texas Instruments' cable modem product line.
MaxLinear will also use the deal to position itself for a new wave of products that will support Wi-Fi 6, a new generation of Wi-Fi that's of particular interest to service providers and got a boost last week following the FCC's decision to open up spectrum in the 6GHz band for unlicensed use.
- MaxLinear to acquire Intel's Home Gateway Platform Division
- Intel in talks to sell home connectivity unit to MaxLinear
- Intel Sizing Up Sale of Home Connectivity Unit – Report
- Why service providers fancy Wi-Fi 6
- 5G proponents win some, lose some in latest FCC proposals
- CableLabs preparing to take DOCSIS 4.0 to the test
- Intel Snares TI's Cable Modem Business
- CableLabs unleashes DOCSIS 4.0 specs
— Jeff Baumgartner, Senior Editor, Light Reading