Intel Rumored to be Selling Phone Chip Business
By LongDistanceUS.com on Tuesday, June 6 2006
Intel Corp. is rumored to be exploring the sale of its communications chip business as it seeks to slim down its operations and focus on its leadership position in microprocessors for personal computers.
Intel today said that it had announced in April a thorough, 90-day review of its operations in order to prepare for changing markets and that the review was now nearly complete.
"When we make a decision, we’ll announce it," said Chuck Mulloy, an Intel spokesperson. “We haven’t made any such decision.”
The report that Intel might divest its communications chip business first surfaced in the San Jose Mercury News last week. In April, the company reported a lower gross margin for the first quarter than competitor Advanced Micro Devices Inc.
Intel has the leading market share in PC microprocessors, but faces an increasingly competitive field and softening demand for its chips as PC sales slow. At the height of the high-tech bubble in 1999, Intel acquired Level One Communications Inc. and DSP Communications Inc. for nearly $4 billion, collectively, to help it compete in the mobile communications space. Intel stopped breaking out financial numbers for its communications business after 2004, when it reported a loss of $791 million on $5 billion in revenue.
Intel Mobile Media Technology is the division that makes baseband integrated circuits, radio frequency transceivers for GSM/GPRS and W-LAN, application processors and other handset technology such as Flash memory for voice and data. Its customers include Motorola Inc., Samsung Electronics Co. Ltd., LG Electronics Co. Ltd., BenQ Mobile Corp., Palm Inc., Pantech Curitel and a slew of other manufacturers, as well as carriers such as Vodafone, Verizon Wireless, Sprint Nextel Corp., T-Mobile USA Inc. and KDDI.
Intel’s competitors in the mobile chip space include Texas Instruments Inc., Qualcomm Inc., Infineon Technologies and Analog Devices Inc., among others.