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Intel to pay $1.4bn for Infineon WLS

But does it really need it?

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ARM and new markets

Intel could broaden its own mobile platform in two ways: purchase capabilities to boost the architecture it is building around Atom, or give up on trying to squeeze Atom into every market and support multiple platforms. Since WLS is wedded to the ARM architecture, we must assume the latter, especially as Intel said in its preliminary statement: "Intel is committed to serving WLS‘ existing customers, including support for ARM-based platforms."

Re-entering the ARM market is sensible, given the weight of market share and developer support the processor platform is acquiring in mobile, and even in markets Intel might have regarded as sacrosanct, like cloud servers and notebooks. WLS has an architectural ARM license, though this is confined to security applications, and a long relationship with the firm, which should be more positive than Intel‘s previous ARM related attempts – most recently, when it acquired the former StrongARM unit of Digital Equipment, turning it into XScale. WLS, at least, brings readymade channels and customers among the mobile giants, which StrongARM did not, leaving Intel to penetrate the unfamiliar territory ill-equipped.

But WLS‘ customers are not confined to the mobile majors. Its parent is a major player in automotive chips and this gives WLS key connections to an important expansion market for all chip firms targeting embedded devices, as cars become a new screen for internet and media consumption. And a key synergy that should not be underestimated is in security. Infineon has worked very hard on chip- level security and its ARM architectural license is centered on this area. The acquisition of McAfee indicated that Intel wants to dominate this segment as security issues become ever more complex with web access stretching to millions of diverse gadgets and embedded systems. In this respect, Infineon will bring far greater value than it does to the more obvious cellphone space. In its own statement, Intel said: "WLS‘ sale enables Infineon to expand leading position in markets for automotive, industry and security technologies," pointing to the real value.

The ARM deal was signed last November, and is targeted at high security SIM cards for multimedia applications. Infineon will integrate its proprietary security features into ARM‘s widespread CPU core implementation. The firm‘s 'Integrity Guard' hardware encrypts data across most parts of the physical chip implementation such as data buses and all memories as well as caches.

A further note of interest that emerged from the bare-bones statement was that Intel would use Infineon‘s baseband expertise to supports its plans to "accelerate LTE". We might all be forgiven for thinking Intel‘s plan had generally been to contain LTE in order to boost the WiMAX technology, over which it has far more influence. Infineon has some advanced LTE activities, including its R&D partnership with Nokia, and this will certainly enable Intel to participate in both 4G platforms, especially when LTE starts to appear in netbooks and notebooks (although, as in 3G, Intel could equally well have partnered in this area).

But it is clearly using its new acquisition plan to "out itself" in terms of the inevitable acceptance of LTE, and it said WLS "expands Intel‘s current Wi-Fi 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 lap- tops, and myriad of Intel Atom processor-based devices, including smartphones, netbooks, tablets and embedded computers." It will also enhance Intel‘s HSPA activities, via Infineon‘s 65nm HSUPA platform (XMM 6160), and upcoming 40nm HSPA platform (XMM 6260).

Copyright © 2010, Wireless Watch

Wireless Watch is published by Rethink Research, a London-based IT publishing and consulting firm. This weekly newsletter delivers in-depth analysis and market research of mobile and wireless for business. Subscription details are here.

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