Intel Acquires Satellite Navigation Chip Business From ST-Ericsson For $90 Million
Intel has acquired the satellite navigation chip business division from ST-Ericsson for $90 million. ST-Ericsson is a joint venture run by STMicroelectronics and Ericsson. Intel CEO Brian Krzanich made the acquisition in about 12 days since taking the position to lead the chip company. ST-Ericsson is being phased out by STMicroelectronics and Ericsson so the sale worked out for them. The financial details of the transaction was unknown.
The sale of ST-Ericsson’s satellite navigation chip will reduce the annual cash needs by around $90 million. ST-Ericsson saw an operating loss of $158 million on sales of $256 million in Q1 2013. STMicroelectronics said that they are expecting to spend around $450 million as part of the transition to phase out the business.
The acquisition will strongly favor Intel’s competition against companies like Qualcomm in the wireless chip business.
“ST-Ericsson is working to sell its connectivity business. This would bring some cash proceeds and reduce wind-down costs,” stated ST’s CEO Carlo Bozotti.