Intel acquires Infineon's wireless group for $1.4B, picks up 2G, 3G, LTE tech

The world's largest chipmaker, Intel Corp. announced Monday morning that it will be acquiring the Wireless Solutions (WLS) business from German semiconductor company Infineon Technologies AG for approximately $1.4 billion. Last year, the division held about 11% of the global cellular baseband market.

"The global demand for wireless solutions continues to grow at an extraordinary rate," Paul Otellini, Intel president and CEO said in a statement today. "The acquisition of Infineon's WLS business strengthens the second pillar of our computing strategy - Internet connectivity - and enables us to offer a portfolio of products that covers the full range of wireless options from WiFi and 3G to WiMAX and LTE."

In July, Intel shut down its WiMAX Program office, and rumors arose that the company was backing off from supporting the WiMAX wireless standard in the face of rising support for LTE. Bill Kircos Director, Product and Technology Media Relations at Intel's Global Communications Group sought to quell such rumors, and said, "There has never been one single wireless standard out there, and WiMAX, LTE, 3G et al will all co-exist. And who knows, others will probably pop up, too, in the coming years. As we've said before, 4G WiMAX and LTE are very similar and Intel could support both technologies. Should LTE or other wireless technologies flourish, common sense says we'd be foolish to not ensure our ambitious Atom processor growth plans in cars, phones, netbooks, tablets, TVs etc. supported multiple wireless formats."

Infineon's wireless division, likewise, has products supporting both standards, including dual-band WiMAX, WLAN chips, and 2G/3G/LTE RF Transceivers. Intel says it will bring together its Wi-Fi and WiMAX offerings with WLS' leadership in 2G and 3G, and then take "a combined path to accelerate 4G LTE."

The cellular baseband market was led by Qualcomm and MediaTek, who held a combined 56% of the total revenue last year. But the market is changing shape as smartphones gradually replace the feature phones most consumers own.

Last week, Strategy Analytics Handset Component Technology analyst Sravan Kundojjala said, "A chip vendor's success in the smartphone world comes from scoring design wins at top-tier smartphone OEMs and supporting software platforms that have market momentum. This is one of the reasons why baseband vendors missed the smartphone boat as many of them were focusing on feature phone and basic phone segments. We think there is enough room for dynamism in the smartphone processor market as new entrants like Intel come into the value chain. If Intel acquires Infineon, as rumoured, that could put more pressure on standalone processor vendors, such as NVIDIA, that currently lack baseband products."