Date: 30th Aug 2010

Intel paves its way to dominate semiconductor market for convergence devices

Intel's policy of one-way focus on processor chips has now changed, it has agreed to acquire the wireless division of Infineon. Intel has already put in CPU and GPU into single semiconductor die/chip and is prioritizing the power consumption more now than any time before. With Infineon's wireless semiconductor devices in its bag of expertise, Intel will be in a position to play dominant role in offering single chip solution for smartphones, tablets and any such hand held convergence devices; a combination of computer, phone and media player.

Through this strategy, Intel gains technology and product differentiating advantage over its competitor AMD and also Intel has created smoother path to overtake ARM processor based and non X86 based SoC vendors in smart phone market.

Intel may have to give up the profit margin it has enjoyed all these years but is no way in a position to loose its leading position in the semiconductor market atleast for another 5/6 years.

Intel is purchasing Infineon's Wireless business by paying US$ 1.4 billion.

The release from Infineon states, "The acquisition expands Intel's current WiFi and 4G WiMAX offerings to include Infineon's 3G capabilities and supports Intel's plans to accelerate LTE. The acquired technology will be used in Intel Core processor-based laptops, and myriad of Intel Atom processor-based devices, including smartphones, netbooks, tablets and embedded computers"

What is the gain for Infineon? Invest more in security ID and automotive semiconductor domain where it presently is number one vendor. Infineon tops in market share of id chips (passport, smart card etc.. ) and power semiconductor devices used in automotives.