Intel is charting a course for its move into mobile, adding GPS capabilities with the purchase of ST-Ericsson’s GNSS (global navigation satellite system) unit. ST-Ericsson is the ill-fated chipmaking venture formed by Ericsson and STMicroelectronics; the two companies decided several months ago to dissolve the venture and sell or absorb its assets.
ST-Ericsson announced the sale yesterday and did not disclose a price, but did say the transaction will cut its cash needs by about $90 million. Not all of that is cash paid by Intel, some of that $90 million is savings ST-Ericsson is projecting since it will not have to pay severance or restructuring charges related to the GPS unit.
GPS chipsets are increasingly important mobile device components, as users rely more and more on smartphones for maps and driving directions. ST-Ericsson competes in this market with Broadcom and Qualcomm, the same competitors it meets in the mobile processor and modem markets. Intel has just a tiny sliver of the market for mobile chipsets now, but remains the world’s largest chipmaker based on its dominance in chips for personal computers and servers.
ST-Ericsson’s GNSS unit employs about 130 people in Singapore and the UK. They are expected to be integrated into Intel’s wireless platform unit within the chip giant’s mobile and communications group. Earlier this month, Intel’s new CEO Brian Krzanich announced a company-wide reorganization that includes the creation of a new devices group which is expected to focus heavily on mobile.
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