Infineon wireless sale said to be close
German firm goes public on talks with "several interested parties"
Published: 2 August, 2010
READ MORE: M&A | Infineon Technologies | Semiconductor
Infineon may be near to finding the long rumoured buyer for its wireless chip unit. The German company is expected to sell the division to Intel but recently, various reports have indicated Samsung Electronics may also be in the running. Tightlipped until now, Infineon has now confirmed it is in discussions with "interested parties about a transaction concerning its wireless solutions segment (WLS)" and said, in a statement, that "significant progress" had been made.
The statement says that several companies are interested in a transaction, which could be a straight buy-out or a joint venture. Infineon's goal is "the strategic development of the WLS", and it says the unit, which is profitable, has attracted interest because of its recent positive development.
Infineon WLS has gained momentum in the past few years, despite severe financial turmoil at its parent, largely because of its highly integrated architecture, which has succeeded at the low end and is expanding into 3G, and its deal to supply basebands to the iPhone and Samsung. The unit also sells RF transceivers, power management ICs and single-chip solutions.
The division had revenue of €917m (about $1.2bn) last year and contributes around 30% of Infineon's total annual revenue of €3bn. Last week, the firm announced improved profits and raised its guidance for its fourth fiscal quarter.
In a research note, Citigroup analyst Glen Yeung said Samsung would be a better fit than Intel - the latter would be re-entering the baseband and ARM-based segments after exiting these areas when it sold its XScale division to Marvell in 2006. Samsung's chip division is currently expanding its own cellphone activities, adding applications processors - notably the high end Hummingbird - to its memory and display products. It could create an end-to-end mobile silicon operation to supply its own handset sister firm as well as customers of its app processors, notably Apple. Samsung is understood to be interested in a JV rather than a full acquisition of Infineon WLS.
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