Intel selling mobile chip unit to Marvell

The rumors of Intel searching for a buyer were circulating, and it looks like they were true: Intel is selling off their mobile chip arm -- responsible for the quite successful XScale group of processors -- to Marvell Technology Group for $600 million. With chips making notable appearances in Treo, Blackberry and HTC devices, and pulling in a reported $250 million in revenue last year, we're still scratching our heads as to why exactly Intel would want to get rid of such a successful portion of their business. We'd think powering smartphones would be a priority for Intel right now, but the word is that Intel will have an option to receive $100 million of the purchase price in Marvell stock, so they might not be out of the game entirely. The chip unit currently employs 1,400 people, and Marvell plans to retain the "vast majority" of them, so this move shouldn't be too traumatic for most parties involved. We just hope they keep up with the R&D to get us smaller, faster, cooler and cheaper chips on the regular.

[Seth Weintraub @ Jun 27th 2006 12:20PM]

I think your earlier post about the Sony UX90 cover the "why". Ultra low power Pentium class processors are the future...

Just like everyone was surprised when the major players were leaving PDA's for smartphones...

[Plaid @ Jun 27th 2006 1:14PM]

I've been over and over on the analysis and the numbers on this, and I just don't see where it makes sense, just on the numbers.

The only thing that I can see is a corporate targeting or political move to "focus on our core business," etc.

I can't really agree with the comment above, either, regarding low power x86. There's simply no comparison between true low-power embedded technologies, and a low-power Pentium. They're completely different markets, nearly completely different technologies.

[Oliver @ Jun 27th 2006 2:37PM]

According to the MercuryNews article (http://www.mercurynews.com/mld/mercurynews/14733041.htm), it leads me to believe this wasn't a very successful portion (if by successful you mean money-making):

"Intel's Xscale business, which includes applications processors for cell phones and chips for BlackBerrys, smart cell phones, handheld computers and portable media players. That business generated approximately $250 million in sales last year, according to sources who saw documents on the business.

Both the communications processor and applications processor businesses, which are being shopped as a single group, are losing money. Intel can get a tax write-off for selling the businesses."

Am I misunderstanding something? Was the Xscale group as a whole doing well and just the applications division within the Xscale group not doing well? The article is somewhat confusing in that regards.

[John Stracke @ Jun 27th 2006 4:00PM]

The combined ARM-based units pull in $400M in *revenue*. That doesn't mean they make a *profit*.

Remember what the world was like 10 years ago, when Intel bought these technologies. The conventional wisdom was that applications were moving off the desktop, and PCs would be replaced by Web terminals. In that kind of environment, diversifying seemed like a survival move for Intel. Today, though, the heavy-lifting apps are still on the PC, and most Web-based apps want a full-power browser. As a result, the PC has at least another 10 years of life in it, so Intel can afford to specialize again.

And, in 10 years, the market demands will be high enough that putting an x86 in a cellphone will just make sense.

[Karl Viklund @ Jun 28th 2006 3:20AM]

Yea, that's pretty strange. I thought Xscale was pretty successful. If the business does not generate loss, why sell it? And didn't they sell the Network processor busniess too? Or what ever it was.

[BionicSniper @ Jun 28th 2006 4:39AM]

Its too bad that AMD doesnt make very many mobile processors. I refuse to but intels crap anymore.