Tuesday, August 21, 2007

LSI shakeout continues with Infineon deal

The transformation of LSI Logic has settled down with the last remaining element - the GSM chip business - sold off to Infineon Technologies for what looks like a knock down price.
The E330m (£235m) deal is expected to close in Q4 and is for roughly the same as the project sales this year (the first six months saw sales of E150m), and Infineon expects a clearly positive EBITA contribution in 2008.
The 700 strong Mobility Products Group came from the April 2007 acquisition of Agere, and includes a design team and sales and marketing operation in Bracknell in the UK. Whether this becomes a standalone group for Infineon or merges with the Infineon design group in Bristol remains to be seen.
Another question is what this means for the comms element of the BlueOnyx strategy of a mobile server - that relied heavily on the Bluetooth and GSM element that came from the Mobility group, coupled with the storage capabilities of LSI. But buying in modules from a stronger player such as Infineon should not be a problem.
“Infineon’s strong commitment to the mobility market will ensure our customers continuity of the LSI product line, ongoing customer support and a broader portfolio of solutions to address their needs,” said Abhi Talwalkar, LSI president and chief executive officer. “LSI is fully committed to work with Infineon to provide a seamless transition for customers.”
Following the carve-out of Qimonda in 2006, Infineon is focusing on three key areas of business: Energy Efficiency, Communications and Security, having acquired Texas Instruments’ DSL CPE business earlier this year. In the Communication Solutions segment, Infineon has picked up new customers including Nokia, LG-Electronics, Panasonic and Samsung.

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