Intel backs Plessey, transfers tuner products

LONDON – U.K. chip maker Plessey Semiconductors Ltd., a once-famous semiconductor name reborn as a management-owned buy-out, has licensed the right to manufacture, sell and support certain products from the digital tuner portfolio of Intel Corp. At the same time Plessey has made a warrant agreement giving Intel's venture capital arm the option to buy an unspecified number of shares in Plessey's holding company.

Derek Rye, group marketing manager at Plessey (Plymouth, England), said that the products include RF tuner ICs and demodulator ICs for satellite, terrestrial and cable televisions and set-top boxes that are implemented in a variety of processes including high-performance bipolar, silicon-germanium and RF CMOS. The products are mature and were originally developed in the consumer electronics business of Zarlink which was acquired by Intel in 2005.

Zarlink was a previous incarnation and descendant of what had been GEC-Plessey Semiconductor Ltd., the U.K.'s last major chip manufacturer.

"These products have shown surprising longevity," Rye said, adding that Intel is the in the process of writing to customers to tell them that their future needs for these ICs could be met by Plessey. Rye added that customer base for these ICs is mainly in Asia and their maturity means that sales are expected to decline gradually but nonetheless the product lines were responsible for "several millions of dollars" of sales in 2011.

Intel was using foundry suppliers to make most of these chips. "They will continue to be made at foundry. In effect Plessey is taking over the supply chain. The customers get the same chips but with a Plessey brand on the package," said Rye.

The warrant agreement, the value of which was not disclosed, is thought to be a means to assure customers that Plessey has a long-term future and is therefore good supplier for ICs previously supplied by Intel.

"This is the start of what we hope will become a long-term relationship and a great collaboration between Intel Labs Europe team, Intel's Technology Manufacturing Group, Intel Capital and Plessey to support these licensed products and to provide world class service to the existing Intel customers using Plessey's capabilities," said Marc Alexander, director of technology licensing at Intel Capital.


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