Marvell Purchasing Intel's XScale Business
Marvell Technology Group, and Intel Corporation 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. The planned sale will give Marvell a strong presence in the growing market segment for processors used in smart handheld devices.
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 XScale technology, include the Intel PXA9xx communications processor, codenamed “Hermon,” which powers Research in Motion’s (RIM) Blackberry* 8700 device. The Intel PXA27x applications processor, codenamed “Bulverde,” is used in the Palm Treo smart phone, the Motorola Q and other 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.
“Marvell and Intel have built a very strong relationship over the past six years and we are very excited to work closely with Intel in transitioning this business into Marvell,” stated Dr. Sehat Sutardja, Marvell’s chairman, president and CEO. “This transaction presents Marvell with a tremendous opportunity to become a long-term leading supplier in the cell phone and consumer electronics market segments.”
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-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.
Rumors first surfaced in early June that indicated Intel was looking to sell some divisions of the company.
Thanks to ChiA for the tip.