In another push toward the digital home, Intel Corp. has inked an agreement with Zarlink Semiconductor Inc. to buy the assets of Zarlink’s RF front-end consumer business. The move will cost Intel $68 million in cash and $2 million in other consideration.
Zarlink’s RF front-end consumer business develops demodulator and tuner technologies for digital television products -- a product category Intel has had its eye on as of late, noting TV in its Viiv consumer electronic chip introduction in August.
While the move takes away a large chuck of revenue from Zarlink -- in fiscal 2005, the RF front-end consumer business saw $53 million in sales as part of the $75 million reported by Zarlink’s consumer communications segment -- the company’s president and CEO maintained that the decision was best for both sides.
“This transaction places all parties in the best position to succeed,” Kirk K. Mandy said in a statement today. “Our RF front-end consumer business will prosper as part of a company that has the scale and critical mass necessary to succeed in the consumer electronics marketplace.”
Indeed, Intel said the RF front-end products will be an integral part of a suite of products powering the company’s new consumer electronics platforms. “Integrating leading digital television technology into these platforms is a key step to deliver the best digital home consumer entertainment experience,” said Glenda Dorchak, VP of Intels’ digital home group, in the statement. “The deep expertise in RF/mixed-signal technology that the Zarlink team brings is key to advancing our consumer electronics business.”
Zarlink’s Mandy further said the transaction also allows the company to focus on the network communications, optical and ultra-low power marketplaces, while it continues to support its remaining consumer communications portfolio.
Subject to closing conditions, including employee retention, the transaction is expected to close in the second half of November.
Intel wholly owned subsidiary Intel Corp. (UK) Ltd. and Zarlink’s United Kingdom subsidiary, Zarlink Semiconductor Ltd., were also involved in the deal, as the RF business is headquartered in Swindon, U.K.
