Intel is considering buying Texas Instruments’ OMAP division according to a highly placed executive at another fabless semiconductor firm.
Speaking to RCR in the hallways of the Grand Hyatt during Computex Taipei this week, the senior executive who cannot be named for confidentiality reasons, told this reporter there were whisperings that TI was willing to consider selling its OMAP division, and Intel was particularly interested.
“If you look at TI now after the acquisition of National Semiconductor, it’s the biggest analogue company in the world now, and OMAP just doesn’t really fit with the vision,” our source told us. “It’s also a question of margins, processors make maybe 40% margins, while TI’s analogue business is pulling in 70% margins. Selling off Omap would allow TI to focus in on its higher margin business,” he went on.
As it stands, TI makes approximately 700-800 million dollars a year on its Omap product line, which puts it in the three billion dollar range should Intel be keen enough to take the bait. Then again, Microsoft paid 8.5 billion for Skype so three billion really could be cheap as chips.
TI has been garnering great praise for its OMAP 4 of late, with many believing it is currently the strongest chipset on the market. Even Google is said to be mulling an optimization for OMAP when it comes to Ice Cream Sandwich.
It wouldn’t be the first time Intel has bought a unit from TI, either. Back in August 2010, Intel snapped up TI’s cable modem unit for use in its consumer electronics products like set top boxes, digital TVs, Blu-ray disc players, companion boxes and related devices.
While there may be several good reasons Intel could be considering buying TI’s ARM based processor unit – such as using the firm as a sandbox and testbed for lower powered processors based on a different architecture – there are also several reasons the move would not totally make sense.
For one thing, both firms have disparate platforms for process tech. TI has a fabless model so Intel would have more foundry relationships to balance while trying to bring Omap in-house eventually, as well as the fact the chip giant is already investing heavily in its own Atom architecture at 22nm and below. It would be a little bit like shooting its own products in the foot were the firm to bring out processors that compete with its own home-grown chips. Not to mention it would be a huge feather in ARM’s cap and a concession on Intel’s part to its bitter rivals in the platform space.
Then again, both firms have strong R&D units in Israel which could theoretically be easily integrated. And Intel certainly has the money to spend if it feels like being a bit experimental.
One way or another, we can’t really validate or disqualify this rumor, but the fact it’s being discussed among senior executives of another fabless semi certainly gives us food for thought.
