Intel may have missed a monumental opportunity to jump into the mobile game early on but that isn’t stopping the company from playing catch-up. Newly appointed Intel CEO Brian Krzanich is on a tear as of late with a major reorganization that will see the creation of a new devices unit and now the acquisition of the mobile GPS chips division of ST-Ericsson.
ST-Ericsson is a joint venture between STMicroelectronics and Ericsson – or maybe I should say “was” as the partnership is in the process of shutting down. The two companies announced on March 18 that the venture would be dissolved due to a drop in sales. True enough, ST-Ericsson posted an operating loss of $158 million during the first quarter.
Financial terms of the acquisition were not disclosed although ST-Ericsson noted the deal will reduce their cash needs by about $90 million through funds from the sale and not having to spend money on restructuring.
Such an acquisition normally wouldn’t be newsworthy but you must consider that Intel rarely acquires technology from outside sources. That paired with the aforementioned creation of a new devices unit and its clear that Intel is working at a feverish pace to capitalize on the lucrative mobile market.
Intel will gain all of the company’s assets in addition to around 130 employees across multiple locations in Bangalore, Singapore and the UK. The new team members will join Intel’s mobile chip division currently led by Herman Eul.