Intel to buy DSP Communications

Intel extended its interest in the embedded market today with an agreement to acquire of digital cellphone-oriented ASIC developer DSP Communications. The purchase will be funded through Chipzilla's capacious wallet with a cash offer that values the publicly-traded DSP at around $1.6 billion. Intel proposes to buy all outstanding DSP shares for $36 a pop. DSP's latest share price was $35.125, valuing the company at $1.4 billion, but these figures are now likely to rise in light of Intel's offer. Intel's interest in the company is clear: it reckons, not unreasonably, that cellular technology is rapidly becoming the basis for a new generation of mobile Internet access devices, and it wants a part of it. And to get in quickly, it's buying in the expertise of someone already there. DSP won't be entirely subsumed into Intel -- the company will continue to operate independently but as a wholly owned subsidiary of Chipzilla's Computer Enhancement Group. The company said it does not anticipate making any immediate changes to its product line, and staff will kept on as Intel employees. ®