Intel exits cell phone chip business, sells unit to Marvel

Mumbai: Intel Corporation, the world's largest manufacturer of computer chips, on Tuesday announced the sale of its ailing communications-chip unit to Marvell Technology Group. The sale, at an agreed amount of $600 million in cash, will leave Intel with the business of making chips for personal computers and servers.

The unit that Intel sold makes microprocessors for handheld devices like smart phones and personal digital assistants, including the BlackBerry device, Palm's Treo phone, and Motorola's Q.

For now, Intel would continue to manufacture the chips for Marvell Tech, which doesn't have its own facilities. Marvell currently makes chips for data-storage computers.

Santa Clara, California-based Intel will now focus on beating back competition from computer chip makers like Advanced Micro Devices Inc. Intel, which now share less than 80 per cent of the market for computer processors, has reported a fall in profits as well.

The acquisition will help Marvell increase its chip sales to cell phone companies and handheld computer makers while Intel can concentrate on its main business of computer chips. The unit has about $100 million in quarterly sales and has smaller profit margins than Marvell's own business.