Report: Intel comm units up for sale

June 5, 2006 – Intel Corp. has put several of its money-losing communications businesses up for sale amid efforts to refocus on core microprocessor business and reverse a slump, and other units could be for sale if the price is right, according to the San Jose Mercury News.

The paper quoted “sources who have seen details of the plans” that indicate Intel has packaged two of its units for a potential combined sale: its communications processor business (including IXP network processor and other chip families for networking gear), and Xscale applications processor business (which makes chips for cell phones, BlackBerry devices, cell phones, handheld computers, and portable media players). Together, the two money-losing units posted sales of roughly $400 million last year, about 4% of total company revenues, according to the report, which quoted sources indicating that other units could be sold “for the right price.”

Linley Gwennap, an analyst at the Linley Group in Mountain View, CA, told the paper that Intel likely will keep those communications businesses that support its consumer or corporate computing segments, such as storage processors, WiFi chips, and WiMax technology.

Several weeks ago Intel indicated it would examine all areas of the company in an effort to maximize efficiencies and eliminate redundancies and underperforming aspects. Analysts have speculated that the company’s flash memory business could be among those areas being scrutinized.


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