Intel Looks to Infineon for the Full SOC
Rumors that Infineon was shopping its wireless business have persisted for months. The company let on it was making progress in the search earlier this month, hyping its market leadership in smartphones and ultra-low-cost entry phones for which it provides baseband processors, radio-frequency transceivers, complete single-chip solutions, and the corresponding system software. (See Infineon in Talks to Sell Wireless Biz and Infineon Sells Its Wireline Business.)
Intel's acquisition of these assets will contribute to its strategy "to make connected computing ubiquitous from smartphones to laptops to embedded computing," the company said.
That strategy gets tweaked every now and again. In 2006, Intel exited wireless, selling its cellphone processor business to Marvell Technology Group Ltd. (Nasdaq: MRVL). (See Marvell Takes a Bit of Intel.)
Infineon provides the connectivity aspect, but the complete system-on-a-chip (SOC) is what Intel is eyeing, because it faces stiff competition in the smartphone market. It may be the world's largest chipmaker, but in the phone CPU market, it is up against Qualcomm Inc. (Nasdaq: QCOM) and ARM Ltd. , which both supply chips that combine network technologies. (See Qualcomm Adds Support to Chipsets.)
Intel president and CEO Paul Otellini said in a statement that Intel will use WLS to target the full range of wireless options from WiFi and 3G to WiMax and LTE, but the focus is on combining all these technologies onto one chip. Infineon's strong suits include mobility, security, and energy efficiency, which would be helpful in building an SOC.
Intel has been making some smartphone inroads. It is beginning to push MeeGo, the combination of its Moblin Linux OS and Nokia Corp. (NYSE: NOK)'s Maemo platform, into mobile devices, and it will reportedly introduce a smartphone-focused chip, dubbed Medfield, early next year. The chip will use Intel's 32nm manufacturing technology and focus on driving down size and power requirements. (See The OS Outlook .)
Outside of smartphones, Intel says it will focus on tablets, netbooks, notebooks, and embedded computing devices.
Germany-based Infineon is responsible for the baseband chips in Apple Inc. (Nasdaq: AAPL)'s iPhone 4 and iPad, including a GSM/W-CDMA transceiver and baseband processor, according to UBM TechInsights. It also powers the 3G connectivity in phones from BlackBerry , LG Electronics Inc. (London: LGLD; Korea: 6657.KS) , Samsung Corp. , Nokia, and others. (See Infineon & Nokia Team Up for LTE Chips and Infineon Intros LTE, 3G Chips.)
Infineon's WLS business brought in €917 million ($1.13 billion) in revenues, or 30 percent of the company's total, in the year leading up to Sept. 30.
Intel's acquisition is slated to close in the first quarter of 2011, and WLS will continue to operate as a standalone business and serve its current customers.
— Sarah Reedy, Senior Reporter, Light Reading Mobile