Seven years after buying the Israeli company DSPC from Ishay Davidi for $1.6 billion, Intel is selling it to Marvell Corporation for less than half that amount. The two companies today announced the deal, in which Intel is selling their communications and application processor business to Marvell for $600 million.
The business includes Intel’s XScale technology, like the Intel PXA9xx communications processor, codenamed “Hermon,” which powers Research in Motion’s (RIM) Blackberry 8700 device as well as the Intel PXA27x applications processor, codenamed “Bulverde,” used in the Palm Treo smart phone, the Motorola Q and other devices.
The XScale, a microprocessor core, is Intel’s implementation of the 5th generation of the ARM architecture. It is the successor to the Intel StrongARM line of microprocessors and microcontrollers, which Intel acquired from DEC’s Digital Semiconductor division as the side-effect of a lawsuit between the two companies.
“In the late 1990s Intel identified the potential for itself in chips for hand-held computers,” relates David “Dadi” Perlmutter, a senior VP at Intel, in conversation with TheMarker. And the area did succeed, he says: “But it fell short of the dimensions we had thought were worthy of further investment by Intel. We concluded it was best to sell the activity and concentrate on our areas in which we see greater potential.”
Under Intel’s direction, the company developed chips for cellphones and hand-hand computers, such as PDAs, as well as processors and applications for communications.
Research firm Forward Concepts estimates that 830 million cellphones shipped in 2005, and that within two years, more than 1 billion cellphones will ship per year.
One billion units is a lot of processors, and Intel wanted its fair share. During the course of the past decade Intel invested between $3 billion and $5 billion in the assets it sold to Marvell, says Will Strauss, an analyst for Forward Concepts. Intel spent nearly $2 billion on a single acquisition to bolster those communications chip efforts. It was a major rat hole of unparalleled magnitude.
The transaction is expected to close in four to five months and is contingent on regulatory approvals. Most of Intel’s 500 workers, according to reports, will be rehired by Marvell.
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[...] Marvell, which bought Intel’s XScale processor business earlier this year for $600 million, has launched its first family of application processors based on that technology. The PXA3xx series are aimed at handsets, GPS navigation systems, wireless handhelds and other consumer electronic devices. Connectivity to technologies like Wi-Fi, WiBro, WiMAX, and Bluetooth v2.0, are featured. [...]
Left by dailywireless.org » XScale Devices: A Marvell on November 30th, 2006