Intel sells comms processor group

By Steve Malone

Posted on 28 Jun 2006 at 14:58

Intel is to sell its communications and application processor business to the Marvell Technology Group. The unit is best known for its Xscale range of processors that power, for example, the Blackberry communications device.

The chip giant is selling the unit for $600 million in cash although it does have the option to take $100 million of the sale price in Marvell shares. The communications and application processor division currently employs around 1,400 people, the majority of which are expected to transfer directly to Marvell.

Intel's communications and application processor business develops and sells processors for handheld devices including smart phones and PDAs. Its processors 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 Xscale chips themselves are based in part on designs licensed from Britain's ARM Holdings. Intel says that the sale will have no effect on Intel's ability for other parts of the company to license ARM technology.

The sale of the division is another step on the path set by the company when it reorganised into five divisions at the beginning of 2004.

The vision of the company was towards a 'platform' strategy that would see Intel target particular segments, such as notebooks and desktops, with complete solutions including processor, supporting chip set and peripherals such as graphics and networking.

In addition, each platform is based around x86 architecture. The communications and application processor division never quite fitted with the vision. Interestingly though, back in April Paul Otellini promised new mobile chips based on the 'core' architecture so Intel may not be abandoning the high growth mobile segment entirely.

In the meantime, Intel needs the cash to help concentrate its efforts on x86 platforms, following a disastrous set of figures in April. The company can now focus its attention much more closely on the battle with an AMD that is steadily eating into Intel's dominance across all segments.

The sale is expected to be completed in the next four to five months.