Samsung taps Infineon as second source for UMTS chipsets

The way forward for Infineon

For Infineon, the Samsung deal will be a welcome boost, confirming industry opinion that the German firm is poised for a significant increase in position in the mobile chip market. This is particularly important at a time of major upheaval for the company.

Its DRAM business has been bleeding money, and last week its CEO Wolfgang Ziebart resigned, and will not be replaced, leaving the company to be run by a four-person management team led by Peter Bauer. Also, shareholder hopes that Infineon would be included in a super-chip venture including fellow European stalwarts STMicro and NXP have been dashed recently, first by those two vendors’ formation of a wireless joint venture that excluded Infineon, and then by STMicro statements last week that it would not invite the German firm to join.

All this may well be leading to a bid by a private equity firm, according to stock market talk, and Kohlberg Kravis Roberts (KKR) is said to be in advanced talks that could make it the biggest investor in the company. Reports speculate that KKR would take a stake of up to 50 per cent via an issue of new Infineon shares and bring NXP, majority owned by a private equity consortium including KKR, together with Infineon.

This is despite the comment by Carlo Bozotti, CEO of STMicro, that he was not interested in adding Infineon's wireless communications business to the joint venture that ST is forming with NXP. "I don't believe it makes sense to integrate the wireless activities of Infineon into our joint venture if available,” he told reporters last week.

Renesas and FOMA

Renesas Technology, whose main wireless business is among Japanese phonemakers, is interested in offering the FOMA platform as a handset reference design to companies outside Japan.

FOMA (Freedom of Mobile Multimedia Access) is NTT DoCoMo’s UTMS-like 3G network, which was developed ahead of the full 3GPP standard and has remained advanced, but somewhat incompatible with other 3G networks, ever since. The main handset suppliers for FOMA are Fujitsu, NEC, Panasonic and Sharp.

"There is an interest to take the FOMA platform outside Japan," said Matthew Trowbridge, CEO of Renesas Technology Europe. At present Renesas offers discrete SH-Mobile baseband and application processors which have to be integrated with other RF and memory subsystems in a handset.

Trowbridge said the move to LTE was likely to be pioneered in Japan and this would encourage a shift of application processor support to high definition graphics, and this would be helped by wider availability of FOMA.

Copyright © 2008, Wireless Watch

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