Intel is in talks to buy VIA Telecom, a Taiwanese phone chip company, according to a report from Bloomberg citing Taipei-based Next Magazine. Following the acquisition news on Wednesday, shares of the Taiwanese firm climbed its daily limit in Taipei, rising almost 7%, the most since September.
Intel continuing with mobile push
VIA Technologies of Taiwan is a 50% owner of VIA Telecom. As per the report, Intel and VIA Technologies are in final stages of negotiations over an acquisition deal that could be worth $500 million. Citing the local magazine, Bloomberg stated that VIA Technologies owns 50% of the chip business, and is therefore, is liable for 50% of the sale proceeds in cash.
Though the report is still unconfirmed, it is in-line with Intel’s shift towards the mobile segment. Intel recently invested $1.5 billion to acquire a 20% stake in Tsinghua Unigroup Ltd, which is the holding company for the Chinese chipmakers Spreadtrum Communications and RDA Microelectronics. In addition, Intel also recently partnered with Fuzhou Rockchip Electronics, a Chinese fabless semiconductor company, to develop chips.
Is VIA Telecom a good fit for Intel?
VIA Telecom, which claims to hold a 30% market share in China, has operations in San Diego, Fremont, Beijing, Hangzhou and Taipei. VIA Telecom, which makes chips for the smartphones, was created by VIA Technologies after acquiring LSI’s WDC baseband division in 2002. Headquartered in Taipei, VIA Technologies describes itself as “the foremost fabless supplier of power efficient” processors based on Intel’s x86 platforms in segments including PC, client, ultra mobile and embedded markets.”
Rumors of Intel’s interest in VIA Telecom were first reported in November last year. The Taiwanese firm could be a good fit for Intel as the former makes products for entry-level devices, and could therefore broaden the product portfolio for the U.S. firm. As per the VIA Telecom’s website, its customers include names such as South Korea’s Samsung Electronics, LG Electronics, China’s Haier Group and Lenovo Group.
As of now, there is no comment from either of the parties, but according to Bloomberg, there is an 80% chance that the deal will go through.
At 9.33 am EDT Thursday, Intel shares were down 0.22% to $32.76, and year to date the stock is down over 10%.