mannerisms

Ruminations on the electronics industry from David Manners, Senior Components Editor on Electronics Weekly.

Is It Broadcom? Is It Intel? Is It Samsung?

Those pesky rumours that Infineon’s wireless business is up for sale for $1.5 billion have been swirling around for a couple of months now, and keep swirling.

 

Will Strauss, CEO of leading wireless analysts, Forward Concepts of Arizona, reckons that there are multiple bidders, stirred into a competitive flurry by the investment bank J.P.Morgan which is managing the sale.

 

Of the various rumoured contenders, Strauss eliminates Apple, but tips Broadcom, Samsung and Intel.

 

Broadcom because of its small share in 3G; Samsung because it wants to be the world No.1 chip company; and Intel because it’s been trying for a decade and a half to make comms ICs.

 

Strauss plumps for Intel because the Nokia-Intel cosy-up did not include 3G/HSPA RF transceiver design, which is: “Something that Infineon is good at (and few others are)”, says Strauss (aka Baron FitzAlan of the County of Worcestershire).

Tags: broadcom, chip company, contenders, decade, samsung

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8 Comments

  1. Mike Bryant
    August 05, 2010 11:36

    I think we come to a discussion on do OEMs want best in class solutions or turnkey platforms.
    Infineon do have a complete and quite capable multimedia solution but Apple wanted the best of everything so chose Infineon’s mobile solution which is world-class but added their own processor and suchlike.
    Similarly Infineon have(had) excellent front end products for wireline, STB and television but never a complete world-class platform solution.
    Conversely in automotive, white goods and industrial they do offer complete solutions so it makes sense to invest in these but I still believe they could have grown the mobile and wireline businesses rather than sell them off.
    One problem I see for any purchaser is there will probably need to be a medium term process switch for the product line so this will invariably delay the new products and lose market share in a highly time driven arena. Also would Apple want to buy from a wireless chipset provider that keeps on trying to sell them a complete applications processor ?
    My guess is if Infineon sell to Samsung, Apple will carry on as Samsung fab the Apple apps processor, but with the others it may have another look at what’s available on the market.

  2. David Manners
    August 05, 2010 07:32

    Thanks Robert, that’s really interesting. Makes me think there could be some positives to this.

  3. Robert
    August 05, 2010 02:18

    I hate to be the one to disagree, but as I see it this is the ideal time for Infineon to sell wireless.
    The basic problem is that they do not have a good “connected” wireless strategy, something that links their disparate products, nor do they have a good consumer Audio Video business. If you compare Infineon wireless to MTK the roadmap looks like a deadend street, the only question is “Is there a cliff or a brick wall at the end of the street”
    Now, as a practical point, it was impossible to sell wireless for 3 of the past 4 years, but Right now it is possible to sell and get a relatively good price.
    Purchasing Infineon’s wireless BU will enable Broadcom to close the gap to QCOM and MTK, (remain in the race). This purchase creates a viable platform (and sufficient market share) that BRCM can build a good application processor business. BRCM also has the AV competency so it can close the gap to MTK in the feature phone sector.
    As for Intel they need a major purchase which shows the market that INTC management is not completely brain dead. Personally, I hope INTC gets the INFX BU, because I’d like to see a good old bare knuckles semi street fight, ah reminds me of my youth…..

  4. David Manners
    August 04, 2010 23:29

    I agree, Mike, i don’t think Infineon is being run like a proper business – there’s some dark, devious plan to deliver a load of dough to a few greedy guys at the expense of the long-term future of Infineon.

  5. expat
    August 04, 2010 22:33

    … the reason is LTE.

  6. Mike Bryant
    August 04, 2010 21:30

    Selling off their wireline business was just as criminal. After 10 years of having the technology and waiting for European telcos to want to deliver 50Mbps to the home it sells it off just before the telcos decide to do it.

  7. David Manners
    August 04, 2010 20:50

    I agree, anon, it is disgraceful to sell the wireless business. My sense is that the Infineon supervisory board and their investor friends have been hankering for a big pay day for some time, and they feel Peter Bauer is the man to get it for them. Undoubtedly they also feel that, in the current semiconductor upturn, now’s the time to get greedy. But a CEO and CFO might naturally disagree if the highest growth segment of their company’s business was to be sold off without there being any commercial strategic reason for it. Enriching the bosses is not a commercial strategic reason. So I suspect this is why Marco Schroter has resigned.

  8. anon
    August 04, 2010 19:51

    One has to ask why Infineon is trying to sell its wireless business. After all, it’s been doing well with its Apple design in. It represents a significant proportion of Infineon’s business, and it’s been growing.
    And why is the Infineon CFO Marco Schroter resigning over company strategy? One can only guess that he disagrees with CEO Peter Bauer, who seems determined to run the company into the ground. What is Bauer’s motivation for this recklessness? Answers on a postcard please.

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