SAN JOSE, Calif. Reports have surfaced that Analog Devices Inc.'s wireless chip business is on the block.
''The Economic Daily Newspaper of Taiwan is speculating that MediaTek may acquire Analog Device's wireless chipset division,'' said analyst Doug Freedman of American Technology Research, in a report. ''In addition to MediaTek, we believe other likely buyers could emerge including homegrown China-based fabless companies backed by the government.''
Taiwan's MediaTek Inc. is a major supplier of consumer and communications ICs. It is a big player in the China market.
''The acquisition would make strategic sense for MediaTek as the company would gain a leg-up on entering the 3-G TD-SCDMA mobile market in China,'' he said. ''We believe it is prudent for ADI to sell the wireless division ahead of the impending volume ramp in China as 3G equipment is deployed. We believe competition will emerge as a result of the ramp and challenge the segment's profitability for all but the lowest cost providers.''
In the segment, ADI makes chipsets, power management and amplifiers to handset manufacturers, wireless base stations and networking equipment and modem suppliers.
''We believe the segment was likely losing money and ADI has underinvested in R&D for some time,'' Freedman said.