LONDON Ė Intel Corp. will operate the wireless business it is set to acquire from Infineon Technologies AG as a separate business, according to executives speaking at a press conference called to discuss the deal.
The wireless business unit employs about 3,400 people, with 1,600 based in Germany, and executives from Intel (Santa Clara, Calif.) said they expect to invest considerable amounts of money and resources to help drive it to become a market leader. However, at least initially, manufacturing will continue to be done in foundries Ė as it is currently being done from within Infineon (Munich, Germany).
The executives stressed that a self-contained wireless business, with its own sales force, would help maintain and grow relations with existing customers. "We will absolutely support ARM-based application processors as well [as those of Intel]," said Anand Chandrasekher senior vice president and general manager of the Intel ultra mobility group. "Also it is our intent to keep this [wireless] as an independent entity reporting into the Intel architecture group so they can preserve their culture as much as possible."
Chandrasekher added: "For a variety of reasons the current market position of the Infineon wireless business is more of a fast follower. It is our intent with a phased strategy shift to move the entity from a fast follower to challenger and eventually into a market leadership position. The first example where we hope to achieve this is to be able to accelerate the delivery of LTE technology into the market place."
Hermann Eul, the Infineon management board member who heads up the wireless business unit and will continue to do so at Intel said: "When it comes to manufacturing strategy and products, these are primarily done in the foundries. Intel is a big customer for foundry and gets large volumes from Taiwan. We will continue with this strategy. Most of them [the chips] are qualified in several foundries." Eul added: "Later on we will have to see what possibilities we might have based on the excellent manufacturing technology Intel has in-house."
Chandrasekher said that Intel had learned from past deals where acquisitions had not produced the expected benefits. He said that maintaining the wireless unit as an independent business with its own sales force would help Intel do a better job this time around. He would not quantify how much Intel would invest in the wireless business or how it would expand the workforce in Germany and around the world, but in a seeming reference to Intel's previous entries and exits from the communications sector he said: "No blink. We will keep going on these."
Related links and articles:
Analysis: Intel's wireless move no guarantee of success
Infineon set to focus on capacity before acquisitions
Infineon's wireless unit goes to Intel