30th August 2007

ST-Infineon merger

With rumours afloat about a potential STMicroelectronics and Infineon Technologies merger, most of the news on it has been on how the thus created power semiconductor giant will face the ire of the European Union’s competition authorities.

 

So it was a refreshing & light take to read comments by David Manners from Electronics Weekly in which he cited culture as a stumbling block for mergers in the chip industry.

I recollect when way back in late eighties/early nineties when I was working at STMicroelectronics (then SGS-Thomson) headquarters in Agrate, Italy. We had just lost a design project to Siemens. To add to the local woes, this was just after Germany won the World Cup. On hearing the project news, one of my disgruntled local colleagues exclaimed – Hey, we just gave them the World Cup; what else do they want??

 

Well, as David said in his blog – Does Bozzoti speak German?

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28th August 2007

Infineon buys LSI Corp.’s mobility products biz

LSI Corp. has signed a definitive agreement to sell its mobility products business to Infineon Technologies for $450 million in cash, plus a performance-based payment of up to $50 million payable in Q1 2009. The sale does not include any production facilities. And about 700 LSI employees will join Infineon.
 

LSI’s mobile business involves mainly mobile radio baseband processors and platforms. While this signals a fabless step from LSI as well as a move towards shedding all its non core biz (LSI’s focus is storage & networking), it signals a larger move of consolidation in mobile communications and for Infineon specifically, this marks it’s strengthening hold in communications biz and its position at important mobile phone makers. It follows its recent acquisition of TI’s DSL CPE unit. 

 

There has been a recent commentary that this decision from Infineon is not technology driven; rather it is to tap on LSI’s customers for its baseband chips.  Now LSI’s top customer here is Samsung and although Samsung is a big client, it has also been losing share as 3G sales have increased; so this doesn’t sound entirely conclusive.

 

Also Nokia, which has a third of the world’s mobile phone market,  had recently announced that it would outsource all of its chip manufacturing to Infineon, Texas Instruments, Broadcom and STMicroelect ronics. This acquisition will strengthen Infineon’s position which is also recovering from the major setback of having insolvent BenQ Mobile as its largest customer.

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27th August 2007

Qualcomm gets into iSuppli’s top 10 chip suppliers list

Despite its woes (in June, Broadcom won a patent-infringement case against Qualcomm before the U.S. International Trade Commission. The import ban, coupled with a separate injunction in a federal court could cost Qualcomm $2.4 billion over five years. In addition, Nokia has recently asked the U.S. International Trade Commission to slap Qualcomm with an import ban on semiconductors that allegedly violate Nokia patents),  Qualcomm has become the first fabless company to figure in iSuppli’s top 10 chip suppliers ranking.

 

While this does give credence to the increasing strength of the fabless design model, it is to be seen how Qualcomm fares in retaining the competitive edge in the unfolding litigation saga.


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