Intel to pay $1.4bn for Infineon WLS, but does it really need it?
Infineon's strengths in security and auto may be crown jewels, not baseband deals
Published: 30 August, 2010
READ MORE: M&A | Intel | Infineon Technologies | Semiconductor | LTE
Continued ...
But WLS' customers are not confined to the mobile majors. It is also a major player in automotive chips, an important expansion market for all chip firms targeting embedded devices as cars become a new screen for internet and media consumption. And a key synergy that should not be underestimated is in security. Infineon has worked very hard on chip-level security and its ARM architectural license is centered on this area. The acquisition of McAfee indicated that Intel wants to dominate this segment as security issues become ever more complex with web access stretching to millions of diverse gadgets and embedded systems. In this respect, Infineon will bring far greater value than it does to the more obvious cellphone space. In its own statement, Intel said: "WLS' sale enables Infineon to expand leading position in markets for automotive, industry and security technologies", pointing to the real value.
A further note of interest that emerged from the bare-bones statement was that Intel would use Infineon's baseband expertise to supports its plans to "accelerate LTE". We might all be forgiven for thinking Intel's plan had generally been to contain LTE in order to boost the WiMAX technology, over which it has far more influence. Infineon has some advanced LTE activities, including an R&D partnership with Nokia, and this will certainly enable Intel to participate in both 4G platforms, especially when LTE starts to appear in netbooks and notebooks (although, as in 3G, Intel could equally well have partnered in this area). But it is clearly using its new acquisition plan to 'out itself' in terms of the inevitable acceptance of LTE, and it said WLS "expands Intel's current Wi-Fi and 4G WiMAX offerings to include Infineon's 3G capabilities and supports Intel's plans to accelerate LTE. The acquired technology will be used in Intel Core processor-based laptops, and myriad of Intel Atom processor-based devices, including smartphones, netbooks, tablets and embedded computers."
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