MediaTek to spin out Ethernet biz – reports

Fabless semiconductor design house MediaTek is continuing its "focus on the core business" strategy, with reports in Asia suggesting it plans to spin off its Ethernet chip operations this year.

The company's Ethernet switches mostly target the home broadband router market, a segment that makes up a relatively small chunk of MediaTek – not a large enough segment to be named separately in its annual report, for example.

A spinoff would follow a strategy the company's followed in the past. In 2013, it turned its automotive business unit into a subsidiary called AutoChips, with a focus on navigation and entertainment devices. Its home broadband gateway business was similarly turned into a standalone subsidiary, EcoNet.

Digitimes quotes "industry sources" who reckon the spin-out is designed to let subsidiaries focus on their specialties.

Its unnamed sources say the Ethernet subsidiary will seek "new strategic partnerships" for the Internet of Things market.

It would also leave head office to concentrate on its battle to knock Qualcomm off its smartphone perch. Its most important customer is Xiaomi, which last year announced it would launch manufacturing in India. ®