Acquisitions shake up telecoms chip landscape

December 19, 2013 // By Nick Flaherty
Two major acquisitions are set to change the landscape of networking and telecom chip development.

Intel has acquired the wireless baseband division of Mindspeed, including its UK picochip operation, while Avago Technologies has acquired network processor developer LSI.
Intel sees the acquisition of the wireless infrastructure division of Mindspeed as one of the final building blocks in its telecoms strategy. The deal ended up being part of the $272m sale of Mindspeed to M/A Com and brings the products, people and IP, much of which comes from the acquisition of UK femtocell chip developer picoChip, into the storage and communications group of Intel. While Intel has been penetrating the basestation controller and cloud server market with its x86 devices, Mindspeed is built around the ARM architecture, and the picoChip products also integrate ARM cores. However the software skills in the radio access network (RAN) is a key part of the acquisition, says Rose Schooler, VP and general manager of the group.
Similarly the $6.6bn acquisition of LSI by Avago creates a highly diversified semiconductor market leader with approximately $5 billion in annual revenues by adding enterprise storage to Avago’s existing wired infrastructure, wireless and industrial businesses. The company says it will be strongly positioned to capitalize on the growing opportunities created by the rapid increases in data center IP and mobile data traffic as a result of the deal.
“This highly complementary and compelling acquisition positions Avago as a leader in the enterprise storage market and expands our offerings and capabilities in wired infrastructure, particularly system-level expertise,” said Hock Tan, President and Chief Executive Officer of Avago. “This combination will increase the Company’s scale and diversify our revenue and customer base. In addition to these powerful strategic benefits, as we integrate LSI onto the Avago platform, we expect to drive LSI’s operating margins toward Avago’s current levels, creating significant additional value for stockholders.”
“This transaction provides immediate value to our stockholders, and offers new growth opportunities for our employees to develop a wider range of