Intel Closes Infineon Wireless Acquisition, Nears Completion Of McAfee Deal


Intel on Monday closed its $1.4 billion acquisition of German chip design firm Infineon's Wireless Solutions unit and said it expects to complete the acquisition of security vendor McAfee by the end of the first quarter.

Infineon's Wireless Solutions division (WLS) will be renamed Intel Mobile Communications, and will be in charge of Intel's increasingly connected chip products. Intel said in a statement that the addition of Infineon's wireless mobility and cellular platforms will strengthen its communication portfolio of Wi-Fi and 4G WiMAX products.

"In the short, intermediate term, it gives a lot of capabilities to our customers that we didn't offer before," said Steve Smith, vice president and director of Intel's PC Client Operations business at Intel, in a conference call. "In the long-term, our technologies will be merged together, but that's over a number of years."

Intel in August added Infineon (WLS) to its portfolio in order to gain a foothold in mobile devices. Europe's second largest semiconductor manufacturer, Infineon also sells baseband chips to Nokia, Samsung, Apple, and other handheld device manufacturers. The acquisition of Infineon is part of Intel's aggressive strategy to enter the mobile market, which includes the formation of Intel's tablet and netbook group.

Intel Mobile Communications will operate as a standalone business within Intel's Architecture Group, so as to maintain continuity with previous efforts in customer sales and support including ARM-based products. Infineon's technology is currently featured inside the ARM-based Apple A4 chip, which powers the iPhone and iPad.

In addition, Intel said it expects to complete its acquisition of security vendor McAfee by the end of the first quarter. Citing the European Union's recent approval of Intel's $7.68 billion merger with security vendor McAfee, Stacy Smith, senior vice-president and chief financial officer at Intel, said in the call that the deal is closing quickly.

The European Commission's decision paves the way for McAfee to become a wholly owned subsidiary of Intel, under Intel's software and services group. Initially announced in August, the Intel-McAfee merger was approved by the U.S. Federal Trade Commission on Dec. 21.

In the call, Intel said it had identified and fixed a circuit design error in its Intel 6 series chipset, code-named Cougar Point, and offered revised income and gross margin forecasts for 2011 based on the McAfee and Infineon acquisitions as well as the Cougar Point recall.