MWC 2011: Betting on the Next Chip M&A DealMWC 2011: Betting on the Next Chip M&A Deal

Sequans Communications -- Our top tip on this side of the coin. It has been developing Long Term Evolution Time Division Duplex (LTE TDD) chipsets and has developed a dual-mode WiMax/LTE TDD product that will attract those WiMax players that need to figure out their network technology development strategy (basically, how to shift over to LTE TDD without losing customers). The company, which was believed to be considering an IPO last year, has a solid customer base and a good reputation as well, although it doesn't yet have a commercial frequency division duplex (FDD) part for LTE. (See NSN, Sequans Make LTE TDD Progress, LTE Watch: Sequans to IPO?, Sequans to Sample LTE Chip and Sagemcom Adopts Sequans WiMax.)

Altair Semiconductor -- Second in line is the device-chip designer that has been pushing its LTE credentials since it unveiled its roadmap in May 2009. The startup's strong suit is its ability to support a large number of different bands of LTE spectrum. This will become more of an issue as vendors look to develop devices that can support international roaming. (See Agilent, Altair Work on LTE, Altair Has TD-LTE Terminal Reference Design, Challengers Shake Up LTE Chips and Altair Does LTE Device Chips.)

Icera Inc. -- An outside bet, Icera has focused on delivering a soft modem that supports LTE and 3G HSPA for dongles and mobile devices. (See Icera Demos LTE/HSPA Modem, Icera, Anite Test LTE Devices, Challengers Shake Up LTE Chips and Chipping Away at LTE.)

Most likely to acquire:

Qualcomm Inc. (Nasdaq: QCOM) -- The San Diego CDMA giant tends to like wireless acquisitions that add to its patent portfolio. It is said to already have around 22 percent of the market for LTE patents. (See Patent Group Tackles 4G Sans Qualcomm.)

Qualcomm started its move into the orthogonal frequency division multiplexing (OFDM) market in 2005 with the US$600 million acquisition of Flarion. OFDM is the base technology behind both LTE and WiMax. (See Qualcomm Calls on Flarion.)

Freescale Semiconductor Inc. -- The baseband chip company is the wild card in our pack, as it tends to build in-house rather than buy technology. The company, however, could acquire to add to its small-cell and LTE TDD capabilities. It's already hitched onto LTE femtocells via Airvana Inc. (See Airvana and Freescale Deliver LTE and Femtocells.)

Intel Corp. (Nasdaq: INTC) -- The chipmaker has been bulking up its LTE capabilities recently, acquiring Blue Wonder Communications GmbH through Infineon Technologies AG (NYSE/Frankfurt: IFX) in November 2010. The gating factor for Intel would be its need to digest and exploit its $1.4 billion of Infineon before adding much more to its plate. (See Intel Works LTE, HSPA+ and Intel’s Infineon Acquisition: All About 3G

It should be noted that time and asking price are a factor in any possible buyouts. Qualcomm and Intel are quickly adding multi-modal capabilities for LTE, and any lead that the startups had is likely to fade during the course of the year.

— Dan Jones, Site Editor, Light Reading Mobile, and Ray Le Maistre, International Managing Editor, Light Reading