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Friday, February 09, 2007

3GSM: Silicon Labs pulls out of mobile phone business

US chip maker Silicon Laboratories is pulling out of the phone chip business to concentrate on other areas such as FM chips and its traditional microcontroller business.
NXP Semiconductor will buy the Aero transceiver, AeroFONE single-chip phone and power amplifier product lines, for $285 million in cash.
“This transaction transfers a one of a kind business in the mobile handset market to NXP, a company with the necessary scale and resources to effectively compete long-term,” said Necip Sayiner, president and chief executive officer of Silicon Labs. “Strategically, this will enable us to focus on the most profitable and highest growth segment of our business, our core mixed-signal products."
My interpretation of this is the move by TI and Infineon into the low cost, single chip phone market for China and India, which will drive prices down, and that Silicon Labs hasn't managed to get a good enough foothold in there. So good for them. What I worry about is NXP trying to do the same, and it will have to compete on price.So it'll be a bloodbath, but the wider industry will benefit from lower cost silicon.

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