Intel Said to Get Spreadtrum Shares for US$1.5 Billion

27 Aug

Intel, which was previously urged to acquire Taiwan’s MediaTek to beef up the growth of its mobile chip business, is rumored to spend US$1.5 billion to purchase 20 percent of Spreadtrum shares, according to Weibo user 52RD. A couple of analysts confirmed the information, while some revealed that Intel’s investment included authorizing Spreadtrum its Core CPU.

Sources familiar with the issue said that Intel plans to acquire 20 percent of Spreadtrum shares for US$1.5 billion; analysts Pan Juitang and Sun Changxu have confirmed the information. However, with Spreadtrum’s market value being less than US$1.5 billion, Intel will likely reach the deal with Tsinghua Unigroup, Spreadtrum’s parent company, a state-run company in China. Tsinghua Unigroup acquired Spreadtrum for US$1.78 billion in July 2013. Sun Changxu also revealed that Intel intends to authorize Spreadtrum its Core CPU.

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Both companies declined to comment.

Tsinghua Unigroup is a solely state-owned company in China. In the past one year, it acquired RDA Microelectronics and Spreadtrum with the help from the government. Spreadtrum quit NASDAQ following the acquisition, which indicated the Chinese government’s move to integrate IC companies. In that case, it may be very difficult for Intel to acquire Spreadtrum’s or even Tsinghua Unigroup’s shares. Intel’s US$1.5 billion offer for 20 percent of the shares is way over Spreadtrum’s estimated value. It is highly unlikely that Intel will obtain Tsinghua Unigrou shares in this transaction. The two sides are likely to achieve a strategic partnership deal in the IC industry.

Intel has been aggressively pushing into the Chinese market. In addition to its move of releasing low-cost tablets with Chinese white label brands, Intel also worked with Rockchip to introduce an Intel branded SoC platform for tablets. Intel has been working aggressively, trying to retrieve the ground it lost to the rise of mobile devices.

 

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