Analog Devices has decided to sell its mobile phone radio and baseband chipset business to Taiwan-based semiconductor company MediaTek.
The deal which includes ADI’s Othello radio and SoftFone baseband chipset product lines, as well as certain cellular handset baseband support operations is valued at approximately $350m.
As part of the deal, MediaTek will gain a global team of approximately 400 product development and customer support staff from ADI.
The product lines include GSM, GPRS, EDGE, WCDMA, and TD-SCDMA chipsets. These product lines represented approximately $230m in revenue for ADI, based on fiscal year 2006 financial results.
ADI said it will continue to address the wireless handset market through its performance analogue, micro-electro mechanical systems (MEMS), and DSPs. “This transaction will allow ADI to focus our resources in areas where our signal processing expertise can provide unique capabilities and earn superior returns,” said Jerald G. Fishman, ADI’s president and CEO.
“This is a winning transaction for customers of both companies,” said JiChang Hsu, general manager of MediaTek’s wireless business. “With these added resources, our customers will be assured a roadmap of innovative solutions supported by a talented team that is focused on the needs of the wireless handset industry. Moreover, this acquisition will also bolster MediaTek’s global operations and development in converging consumer solutions.”
The boards of directors of both companies have approved the transaction, which is expected to close near the end of 2007, following the satisfaction of regulatory requirements and other customary closing conditions. Tax assessments and any additional closing costs will reduce the net amount of proceeds received by ADI from the transaction.