Intel Corp has announced that it intends to buy DSP Communications Inc for $1.6bn to increase its presence in the mobile phone chipset market. Initially, Intel will use software and baseband technology from the Cupertino, California-based company to develop chipsets for the CDMA, TDMA and PDC standards. Intel hopes that the acquisition will stand it in good stead as third generation mobile standards solidify and the market for wireless data services grows.
DSPC will become a wholly owned subsidiary and will be part of Intel’s Computing Enhancement Group. Intel will combine its silicon with DSPC’s algorithms, the CEO of DSPC, David Gilo, said that he expected the integration effort to take between twelve and eighteen months. Intel CEO, Craig Barrett, said that the acquisition would build on the strength of Intel’s StrongARM processor and Flash memory chips in the handset market. However, Intel was keen to stress that the deal would not affect its existing work on mobile phone chipsets with Qualcomm Inc, Texas Instruments Inc and Analog Devices Inc.
DSPC is particularly strong in the Japanese market, working with customers such as NTT Mobile Communications Network Inc and Sanyo Corp. Ron Smith, vice president and general manager of the Computing Enhancement Group said that Intel sees DSPC’s Japanese presence as a way for Intel to establish a head start in the 3G market because Japan will have 3G networks up and running before the US. In the future, Smith also envisages the Bluetooth short- range wireless interconnect chips being integrated with DSPC- developed chipsets.
However, Intel was less forthcoming on the question of patents and licenses. DSPC has frequently cross-licensed or otherwise bought technology to help develop its products from companies such as Qualcomm. Neither Barrett nor Smith would be drawn on the question, other than to say that Intel either had or would buy whatever patents it needed. Interestingly, DSPC is already working with IBM on PDC chipsets, but Gilo said that the subsidiary would continue to work with IBM and actively seek other chipset deals.
