Marvell to purchase Intel's communications and application processor biz

Marvell Technology Group and Intel Corporation announced that they have
signed an agreement for Intel to sell its communications and application
pro­­- ce­ssor business to Marvell for a purchase price of $600 million plus
the assumption by Marvell of certain liabilities. The planned sale will give
Marvell a strong presence in the growing market segment for processors used in
smart handheld devices.

The sale also will enable Intel to focus its investments on its core
businesses, including high-performance, low-power Intel Architecture-based
processors and emerging technologies for mobile computing, including Wi-Fi and
Wi-Max broadband wireless technologies. The transaction is expected to close in
approximately four to five months and is subject to regulatory review and other
normal closing conditions.

Intel's communications and application processor business develops and
sells processors for handheld devices including smart phones and personal
digital assistants. The business' processors, based on Intel XScale
technology, include the Intel PXA9xx communications processor, codenamed 'Hermon',
which powers Research in Motion's (RIM) Blackberry 8700 device. The Intel
PXA27x applications processor, codenamed 'Bulverde', is used in the Palm
Treo smart phone, the Motorola Q and other devices.

SEAN MALONEY: Sale will enable Intel to focus on its core businesses

“Marvell and Intel have built a very strong relationship over the past six
years and we are very excited to work closely with Intel in transitioning this
business into Marvell,” stated Dr Sehat Sutardja, Chairman, President and CEO,
Marvell. “This transaction presents Marvell with a tremendous opportunity to
become a long-term leading supplier in the cell phone and consumer electronics
market segments.”

“In recent years, Intel has made significant progress and won major
customers with this business,” said Sean Maloney, Executive VP and GM -
Mobility Group, Intel. “The communications and application processor segments
continue to present an attractive market opportunity, and we believe this
business and its assets are an optimal fit for Marvell. We have a long history
of working closely with Marvell and believe it has the ability to grow the
business while maintaining customer commitments.”

Intel's communications and application processor business includes
approximately 1,400 employees involved in a variety of functions, including
engineering, product testing/validation, operations and marketing. It is
expected that the vast majority of these employees will become employees of
Marvell.

Intel currently intends to receive the entire purchase price in cash.
However, Intel has the option to take up to $100 million of the $600 million
purchase price in Marvell common stock.

After the close of the transaction, Intel intends to continue manufacturing
products currently sold by this business for handheld devices and embedded
applications, and to manufacture products that are being designed into upcoming
devices. This arrangement is expected to continue while Marvell arranges other
manufacturing resources. Intel and Marvell do not anticipate disruptions in the
supply of these products due to this planned sale.

This planned sale does not impact the ability of other Intel businesses in
the networking and storage market segments to continue to use ARM-based, Intel
XScale processors. Those Intel businesses will be able to continue licensing
chip designs directly from ARM Holdings PLC and modifying the designs for their
needs. 

DQC News Bureau