Mediatek expands into home networks with Ralink buy
Follows Qualcomm in extending cellphone activities towards Wi-Fi, broadband and multiscreen content
Published: 17 March, 2011
READ MORE: M&A | MediaTek | Semiconductor | Wi-Fi
Taiwan's MediaTek has used its presence in low cost Chinese markets to overtake everybody but Qualcomm in cellphone basebands. Now it aims to follow its US rival's example and move into the wireless home too, and has acquired Ralink to help it.
Ralink supplies chips for home Wi-Fi equipment as well as DSL broadband access and USB, and has been involved in many efforts to extend the 802.11 standard's remit, including the WiGig group for 60GHz connections.
The purchase takes Mediatek beyond the handset and makes it a portfolio player spanning all the networks that deliver consumer content and apps, at home as well as on the move. This is a goal Qualcomm has also been pursuing through its own acquisitions, including that of Wi-Fi chipmakers Atheros and Airgo.
Mediatek is likely to target its familiar Chinese markets, riding on the rise of broadband usage there and applying the same cost efficiencies that have made it a formidable player in cellphones. But it will also want Ralink to help it improve its margins and compete in wider territories. The firm has struggled in the past year against new local rivals and slowness in shifting towards 3G and smartphones.
Chairman MK Tsai said in a statement: "We expect Wi-Fi connectivity to continue increasing in popularity in the portable consumer and enterprise electronics industries, as well as the digital home. Thus, MediaTek's addressable market in game consoles, media players, tablets, and TVs will instantaneously expand with the addition of Ralink's full line of Wi-Fi chips, including fixed, portable and mobile solutions; next generation innovations in technologies like 802.11 ac/ad and VDSL; and world class customers."
Under the terms of the deal, Mediatek has acquired Ralink through a share swap of one share for 3.15 shares of Ralink. The transaction has been approved by the respective boards and is expected to close on October 1. Last year, Ralink announced an agreement to take over the broadband chipset supplier TrendChip Technologies of Taiwan.
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