Marvell Technology Group, Ltd. and Intel Corporation have signed an agreement for Intel to sell its communications and application processor business to Marvell for a purchase price of US$600 million plus the assumption by Marvell of certain liabilities.
Intel says the sale will enable the company 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.
Intel’s communications and application processor business develops and sells processors for handheld devices including smartphones and personal digital assistants (PDAs). 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 (pictured) and other devices.
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.
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.
According to Intel, 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 other Intel businesses will be able to continue licensing chip designs directly from ARM Holdings PLC and modifying the designs for their needs.
Marvell operates in the development of storage, communications and consumer silicon solutions. Marvell’s diverse product portfolio includes switching, transceiver, communications controller, wireless, and storage solutions.