Semi Conscious
Comment
Roger
dylan.mcgrath
Thanks Roger. I must admit I haven't heard that one or even considered it. And ...
Could Intel buy TI's OMAP division?
Dylan McGrath
8/16/2011 4:24 PM EDT
[Update 8/17/2011: A spokesperson for TI responded to this blog entry with a strong denial that the OMAP business is for sale. This denial, which came after the company initially declined to comment on the rumors, kind of casts the following speculation in a different light. Please read it with that in mind.]
Try this one on for size: Intel Corp., whose x86 architecture is locked in a struggle for supremacy with the ARM architecture, could actually be a perspective buyer of Texas Instruments Inc.'s line of ARM-based applications processors, according to speculation by an analyst.
For several weeks, rumors have been circulating that TI is attempting to sell off its OMAP division. Most recently, the technology news site SemiAccurate reported Tuesday (Aug. 16) that Broadcom Corp. is considering the acquisition of OMAP.
Predictably, TI won't comment on whether or not OMAP is for sale. A company spokesperson gave the standard-issue "no comment" when asked about the speculation, citing a long-standing company policy not to discuss rumors or speculation about mergers, acquisitions or divestitures. [See updated note above regarding TI's subsequent denial of the rumors.]
As many have pointed out, the divestiture of OMAP might make sense for TI, particularly since the company has hitched its wagon more tightly to analog than ever before. Analyst Craig Berger of FBR Capital Markets recently downgraded TI's stock to "market perform" from "outperform," in part because TI is borrowing money to finance its $6.5 billion acquisition of National Semiconductor Corp. So, the $1 billion or so that OMAP might fetch would probably come in handy.
In downgrading TI, Berger also noted that Nvidia Corp. has the early lead in applications processors for tablets with its Tegra 2. But OMAP hasn't exactly been a flop. OMAP design wins include Research in Motion Ltd.'s Blackberry Playbook and Motorola Mobility Inc.'s Droid smartphones, and rumor has it that OMAP 4 will be used in the reference platform for the next version of Google's Android operating system (codenamed Ice Cream Sandwich).
That's all well and good, but where exactly does Intel fit in?
According to Will Strauss, principal analyst at market research firm Forward Concepts (Tempe, Ariz.), if OMAP is indeed in play, Intel is a possible suitor. Here's why: Strauss believes that smartphone and tablet OEMs will increasingly look to leverage SoCs that integrate both the applications processor and the cellular baseband on the same die. Since TI is phasing out its baseband operations, the firm may have an even tougher time notching OMAP design wins going forward, Strauss believes. Intel, on the other hand, finalized the acquisition of Infineon Technologies AG's wireless chip business earlier this year, and might be interested in an ARM-based applications processor that it could marry with the baseband technology.
Strauss, who emphasized that he was speculating, noted that the price that OMAP would fetch, which he estimated at certainly $1 billion or more, means there are only a handful of companies who could pull off a deal.
"People are looking at alternatives to Intel [architecture]," Strauss said. "Maybe Intel should, too."
Intel, of course, has marketed ARM-based processors in the past. But the company sold the XScale line to Marvell Technology Group Ltd. and has phased out other ARM-based products in its catalog in favor of those based on x86. S
Strauss noted that another frequently rumored suitor for OMAP—Advanced Micro Devices Inc. (AMD)—might also be interested in a deal, but that such an offer would likely be a merger as opposed to a cash buy because AMD doesn't have Intel's deep pockets.
Strauss noted that AMD has dabbled in non-Intel-architecture chips before, taking a license from MIPS in 2002. But AMD sold its MIPS-based processor line to Raza Microelectronics Inc. in 2006. "I thought they [AMD] really missed the boat on that one," Strass said.
AMD has been widely criticized for being slow to bring to market processors for tablets and smartphones. Getting its hands on OMAP through merger or another arrangement would give the company a big boost in that department.
But in addition to not having the resources to make a straight cash buy of OMAP, any attempt by AMD to get its hands on OMAP is complicated by another matter. More than seven months after showing CEO Dirk Meyer the door (some say for being to0 slow to bring to market processors for tablets and smartphones) AMD is still looking for its next permanent CEO. It's hard to imagine AMD pulling off a deal of this magnitude without the sign off of the person who will be running the show, eventually.
Try this one on for size: Intel Corp., whose x86 architecture is locked in a struggle for supremacy with the ARM architecture, could actually be a perspective buyer of Texas Instruments Inc.'s line of ARM-based applications processors, according to speculation by an analyst.
For several weeks, rumors have been circulating that TI is attempting to sell off its OMAP division. Most recently, the technology news site SemiAccurate reported Tuesday (Aug. 16) that Broadcom Corp. is considering the acquisition of OMAP.
Predictably, TI won't comment on whether or not OMAP is for sale. A company spokesperson gave the standard-issue "no comment" when asked about the speculation, citing a long-standing company policy not to discuss rumors or speculation about mergers, acquisitions or divestitures. [See updated note above regarding TI's subsequent denial of the rumors.]
As many have pointed out, the divestiture of OMAP might make sense for TI, particularly since the company has hitched its wagon more tightly to analog than ever before. Analyst Craig Berger of FBR Capital Markets recently downgraded TI's stock to "market perform" from "outperform," in part because TI is borrowing money to finance its $6.5 billion acquisition of National Semiconductor Corp. So, the $1 billion or so that OMAP might fetch would probably come in handy.
In downgrading TI, Berger also noted that Nvidia Corp. has the early lead in applications processors for tablets with its Tegra 2. But OMAP hasn't exactly been a flop. OMAP design wins include Research in Motion Ltd.'s Blackberry Playbook and Motorola Mobility Inc.'s Droid smartphones, and rumor has it that OMAP 4 will be used in the reference platform for the next version of Google's Android operating system (codenamed Ice Cream Sandwich).
That's all well and good, but where exactly does Intel fit in?
According to Will Strauss, principal analyst at market research firm Forward Concepts (Tempe, Ariz.), if OMAP is indeed in play, Intel is a possible suitor. Here's why: Strauss believes that smartphone and tablet OEMs will increasingly look to leverage SoCs that integrate both the applications processor and the cellular baseband on the same die. Since TI is phasing out its baseband operations, the firm may have an even tougher time notching OMAP design wins going forward, Strauss believes. Intel, on the other hand, finalized the acquisition of Infineon Technologies AG's wireless chip business earlier this year, and might be interested in an ARM-based applications processor that it could marry with the baseband technology.
Strauss, who emphasized that he was speculating, noted that the price that OMAP would fetch, which he estimated at certainly $1 billion or more, means there are only a handful of companies who could pull off a deal.
"People are looking at alternatives to Intel [architecture]," Strauss said. "Maybe Intel should, too."
Intel, of course, has marketed ARM-based processors in the past. But the company sold the XScale line to Marvell Technology Group Ltd. and has phased out other ARM-based products in its catalog in favor of those based on x86. S
Strauss noted that another frequently rumored suitor for OMAP—Advanced Micro Devices Inc. (AMD)—might also be interested in a deal, but that such an offer would likely be a merger as opposed to a cash buy because AMD doesn't have Intel's deep pockets.
Strauss noted that AMD has dabbled in non-Intel-architecture chips before, taking a license from MIPS in 2002. But AMD sold its MIPS-based processor line to Raza Microelectronics Inc. in 2006. "I thought they [AMD] really missed the boat on that one," Strass said.
AMD has been widely criticized for being slow to bring to market processors for tablets and smartphones. Getting its hands on OMAP through merger or another arrangement would give the company a big boost in that department.
But in addition to not having the resources to make a straight cash buy of OMAP, any attempt by AMD to get its hands on OMAP is complicated by another matter. More than seven months after showing CEO Dirk Meyer the door (some say for being to0 slow to bring to market processors for tablets and smartphones) AMD is still looking for its next permanent CEO. It's hard to imagine AMD pulling off a deal of this magnitude without the sign off of the person who will be running the show, eventually.
|
|
|
|
|
Navigate to related information
Roger
8/16/2011 7:43 PM EDT
I don´t believe that Intel would be back to the ARM world, but for Broadcom ...
Sign in to Reply
Roger
8/16/2011 7:44 PM EDT
Dylan, what about Atmel ?
Sign in to Reply
dylan.mcgrath
8/17/2011 2:19 AM EDT
@Roger-I'm not sure I follow. Are you suggesting that Atmel could be an Intel acquisition target or that Atmel could be a buyer for OMAP?
Sign in to Reply
KARTHIKSRINIVASA.Srinivasa
8/17/2011 1:00 AM EDT
I too dont believe Intel would be back with ARM. They would never have sold xscale otherwise
Sign in to Reply
t.alex
8/17/2011 11:17 AM EDT
Big mistake in the past.
Sign in to Reply
David.Blaza_#1
8/17/2011 7:38 AM EDT
The only way this makes any sense is if the TI board has decided that becoming a pure play analog company is the best long term growth strategy. The acquisition of National supports this and Analog is a very high margin business with less volatility than selling processors. It takes an army of software developers to compete in processors these days and that drives down margins. However I doubt this is more than speculation, a move like this would cut off a lot of TI's growth potential and where would it leave their DSP and MSP430 businesses?
Sign in to Reply
PremierSnow
8/17/2011 7:39 AM EDT
I think Broadcom is the front-runner here. The company has admitted they are lagging the competition in apps processors and haven't really communicated a roadmap. And we all know how aggressive Broadcom is with M&A. Broadcom could integrate OMAP with its baseband and other connectivity solutions while leveraging its position with leaders like Apple.
Sign in to Reply
Robotics Developer
8/17/2011 11:02 AM EDT
I like the Broadcom rumor as it makes sense but the AMD option is very interesting as well. The OMAP family might play well with / compliment the current AMD fusion family and together AMD might be is a better position to compete with Intel and others for market share. I think this bears watching..
Sign in to Reply
help.fulguy
8/17/2011 11:55 AM EDT
Dylan, dont waste your time on catchy headline articles. There are much better topics to write articles on. x86 is like religion at Intel, You cant expect them to convert their religion that easily without a good fight.
Sign in to Reply
DCPARR
8/17/2011 11:55 AM EDT
I highly doubt Intel is interested in purchasing any prepackaged ARM solution when they could have easily Strongarmed their way in years ago. Instead, they sold off Strongarm. I seriously doubt if they will revisit that abandoned road.
AMD is highly doubtful as an ARM licensee also, but for entirely different reasons then Intel. AT this point in time, they have neither the revenue or focus to be diverted by an ARM development segment.
Broadcom makes a lot of sense. They threw much development into their MIPS based processors. Perhaps if they purchased OMAP they would enhance it with a Hypertransport interface to compliment their communications offerings..
Sign in to Reply
help.fulguy
8/17/2011 12:07 PM EDT
BTW, Dylan, Charlie's guys on Semi-Accurate will open a can of Whoop-ass if you continue to copy their article here and not give them credit...LOL
Sign in to Reply
dylan.mcgrath
8/17/2011 2:52 PM EDT
@help.fulguy- unfair criticism. I've duly credited SemiAccurate with reporting that Broadcom is considering acquiring OMAP and included a link to the article (second paragraph). The rest of the article is based on correspondence with TI, Craig Berger's report and my conversation with Will Strauss.
Sign in to Reply
DrDon
8/17/2011 12:23 PM EDT
My money is on Google...buy Motorola Wireless to line up against Apple, then buy OMAP (Apple bought PA-SEMI) to get control of the silicon platform Droid runs on. This would work.
Sign in to Reply
p_g
8/17/2011 2:32 PM EDT
I like your idea DrDon. But my feeling is google is not into cell phone making, they need it to protect their OS so they can continue to support Android. Probably Google will keep patents and after few years will spin off Motorola again. Or may keep it for its google TV division.
Sign in to Reply
Roger
8/17/2011 3:51 PM EDT
Dylan,
My question was about Atmel buying OMAP division.
Sign in to Reply
dylan.mcgrath
8/17/2011 4:19 PM EDT
Thanks Roger. I must admit I haven't heard that one or even considered it. And now TI has responded with a strong denial that OMAP is even for sale. So it seems at least at this point like all of this speculation was (or at least is now) for naught.
Sign in to Reply
Roger
8/17/2011 9:06 PM EDT
YEah, you are right.
But you did it very well.
Congrats!
Sign in to Reply