Marvell acquires Intel's XScale business

Posted on Tuesday, June 27 2006 @ 22:51 CEST by Thomas De Maesschalck
Marvell and Intel today announced that they have signed an agreement for Intel to sell its communications and application processor business to Marvell for a purchase price of $600 million plus the assumption by Marvell of certain liabilities. The planned sale will give Marvell a strong presence in the growing market segment for processors used in smart handheld devices. The sale also will enable Intel to focus its investments on its core businesses, including high-performance, low-power Intel Architecture-based processors and emerging technologies for mobile computing, including Wi-Fi and WiMAX broadband wireless technologies. The transaction is expected to close in approximately four to five months and is subject to regulatory review and other normal closing conditions.

Intel's communications and application processor business develops and sells processors for handheld devices including smart phones and personal digital assistants. The business' processors, based on Intel(R) XScale technology, include the Intel(R) PXA9xx communications processor, codenamed "Hermon," which powers Research in Motion's (RIM) Blackberry(a) 8700 device. The Intel PXA27x applications processor, codenamed "Bulverde," is used in the Palm Treo(a) smart phone, the Motorola Q(a) and other devices.

Intel's communications and application processor business includes approximately 1,400 employees involved in a variety of functions, including engineering, product testing/validation, operations and marketing. It is expected that the vast majority of these employees will become employees of Marvell.

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. The amount of that charge, if any, has not yet been determined. Intel will provide information regarding the financial impact of the transaction at a later time.

After the close of the transaction, Intel intends to continue manufacturing products currently sold by this business for handheld devices and embedded applications, and to manufacture products that are being designed into upcoming devices. This arrangement is expected to continue while Marvell arranges other manufacturing resources. Intel and Marvell do not anticipate disruptions in the supply of these products due to this planned sale.

This planned sale does not impact the ability of other Intel businesses in the networking and storage market segments to continue to use ARM(a)-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.


About the Author

Thomas De Maesschalck

Thomas has been messing with computer since early childhood and firmly believes the Internet is the best thing since sliced bread. Enjoys playing with new tech, is fascinated by science, and passionate about financial markets. When not behind a computer, he can be found with running shoes on or lifting heavy weights in the weight room.



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