Print 10 comment(s) - last by caboosemoose.. on Jun 28 at 10:53 PM

Intel says it wants to focus on other areas of its business

Intel announced today that it will be selling its Communications and Applications Processor business over to Marvell for $600M USD. The business unit at Intel is credited with developing such processors as Intel's XScale series of mobile processors including the PXA9xx family used in RIM's Blackberry 8700 as well as other processors that are used in a wide variety of handhelds. "In recent years, Intel has made significant progress and won major customers with this business," said Sean Maloney, Intel's executive vice president and general manager of the Mobility Group.

Both Marvell and Intel say that while the transaction will take roughly four months to complete, customers should not expect any delays or supply problems during or after this time. Intel will continue to manufacture the products until Marvell can find a suitable manufacturer. Intel's Communications and Applications Processor business holds roughly 1,400 employees and has been a very successful operation for Intel over the last several years. Its products have been used in many handhelds from ASUS, Dell, HP, Motorola, HTC, Palm, among others.

According to Intel's press release "Intel currently intends to receive the entire purchase price in cash. However, Intel has the option to take up to $100 million of the $600 million purchase price in Marvell common stock. Upon closing, Marvell may record a one-time charge for purchased in-process research and development expenses."

2006 has been a year of restructuring for Intel. The company made several announcements this year about the reorganization of its memory business. Intel told the press that its NOR memory technology was under examination but promised no layoffs. Intel also announced a deal earlier in the year to jointly develop NAND flash memory with Micron and launched a joint venture called IM Flash Technologies LLC. Intel says that the deal with Marvell will not impact other business areas that focus on the mobile market. Some of Intel's other products use ARM-based technology that Intel previously licensed and the company reassures customers that interruptions will not occur.

The company also states "This planned sale does not impact the ability of other Intel businesses in the networking and storage market segments to continue to use ARM-based, Intel XScale processors. Those Intel businesses will be able to continue licensing chip designs directly from ARM Holdings PLC and modifying the designs for their needs."

Interestingly, earlier this month AMD made a similar announcement to spin off its Alchemy division which produces processors for the hand held market. AMD's Alchemy processors are MIPS based and the division was transferred to Raza Microelectronics.

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Someone know something I don't?
By Dfere on 6/27/2006 1:22:52 PM , Rating: 2
What gives???? Low profit margins in this industry? Or should we be expecting shrunken pIII's in the next round of handhelds?

RE: Someone know something I don't?
By Fox5 on 6/27/2006 1:29:29 PM , Rating: 2
The power level is certainly getting low enough where x86 processors could make it in the embedded market. I wouldn't mind a PDA with an x86 processor, a stripped down version of XP, and a 2GB flash harddrive, it'd make PDAs somewhat useful.

By The Cheeba on 6/27/2006 1:31:23 PM , Rating: 2
These things run on milliwatts -- x86 processors are just hitting the single Watt level. However, I bet with some fine tweaking an x86 processor could easily get down to this level.

RE: Someone know something I don't?
By psychobriggsy on 6/27/2006 1:40:41 PM , Rating: 2
Intel appears to be wanting to push x86 for mobile uses, including phones. They've promised a 0.5W processor capable of running Vista by 2010 for example - presumably on a 45nm or 32nm process.

On the other hand, your typical ARM processor uses a lot less power than that today, has great options for hardware integration (DSPs and the like, e.g., TI's OMAP), and the software running on mobile platforms is far more suited than Vista. These processors will also benefit from process enhancements and so on, and will get faster. Today's 624MHz XScale PDA will evolve into >1GHz PDAs fairly soon.

Maybe Intel will pull it off, but I can't see why companies would migrate to 'mobile x86 processors' if the industry is standardised on ARM as it is now. They'll have to offer comparable power consumption, small die/package size, high integration, high performance, ease of transition for software, …

RE: Someone know something I don't?
By jkresh on 6/27/2006 4:10:01 PM , Rating: 2
It might be that Intel is thinking that proper Origami devices will be doable soon (something like the Sony (ux50) but with a 6+ hour battery life and a price of $500-700).

By PandaBear on 6/27/2006 4:58:34 PM , Rating: 3
While everyone talks about it based on Intel's perspective. I think we should also look at why Marvell wants to buy it. Marvell is excellent at ASIC design and power many hard drives (WD, Samsung, Toshiba, and some components for Maxtor and Seagate). They have the best laptop drive controllers and they are making inroad in wireless communication too.

Intel's Xscale wasn't doing that well in the ASIC market standard. They are too expensive, product is not the latest and greatest, and they are just too big and slow to compete. Transfering those engineers and products to Marvell would be a good idea as they can gain talents and integrates their products better.

$600M is a damn good deal for a 1400 employees and existing products.

One letter makes a difference
By InternetGeek on 6/27/2006 8:49:39 PM , Rating: 2
I read it as 'Marvel' and got so confused...

RE: One letter makes a difference
By Lord Zado on 6/28/2006 7:47:42 AM , Rating: 2
I did that at first glance too.

A Good deal at a Good Price.
By crystal clear on 6/28/2006 2:41:04 AM , Rating: 2
This division/plant is situated in Israel with one of the best talents in this sector,its situated in a high tech zone
in Petach Tikva.This besides other Intel properties in HAIFA
Jerualem,Kiryat gat-all in Israel.
All of them heavily involved in R&D with a very good track
record of product developments.HAIFA being the source of
Woodcrest (R&D).
Marvel has recieved for the pruchase amount a huge pool of
talented engineers/technicians with a good track record.
They will continue their work with Marvel & Marvel has only
to gain from this deal.
Marvel had their timing right to clinch such a deal whilst
Intel is restructoring.

By caboosemoose on 6/28/2006 10:53:39 PM , Rating: 1
Intel's Communications and Applications Processor business holds roughly 1,400 employees and has been a very successful operation for Intel over the last several years.

Yeah, so successful that Intel is dumping it.

"We are going to continue to work with them to make sure they understand the reality of the Internet.  A lot of these people don't have Ph.Ds, and they don't have a degree in computer science." -- RIM co-CEO Michael Lazaridis

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