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telecommunications

Apple acquiring most of Intels smartphone modem business in $1B deal

Apple has entered into a deal to acquire a majority of Intel’s modem business, TechCrunch has learned. The deal, valued at around $1 billion, includes Intel IP, equipment, leases and employees, with Apple bringing over 2,200 new roles and bringing its portfolio up 17,000 wireless technology patents.

“We’ve worked with Intel for many years and know this team shares Apple’s passion for designing technologies that deliver the world’s best experiences for our users,” Apple SVP Johny Srouji said in a release tied to the news. “Apple is excited to have so many excellent engineers join our growing cellular technologies group, and know they’ll thrive in Apple’s creative and dynamic environment. They, together with our significant acquisition of innovative IP, will help expedite our development on future products and allow Apple to further differentiate moving forward.”

The deal confirms earlier rumors that Apple would acquire the business in order to permanently uncouple itself from Qualcomm, the source of much contention for both parties over the last several years. Apple and Qualcomm settled their differences back in April, with both parties agreeing to drop litigation.

Apple and Qualcomm are ending their legal battles

The move was believed to be an attempt for Apple to ready the iPhone for a 5G push, expected at some point in 2020. Intel’s 5G solution has generally been regarded as the inferior of the two, with the company having missed out on the last decade’s smartphone boom.

The move is also in line with Apple’s recent push to build all of its device components in-house. CEO Tim Cook signaled the way forward for the company a decade ago, when he told the press, “We believe that we need to own and control the primary technologies behind the products that we make, and participate only in markets where we can make a significant contribution.”

Under the deal, Intel retains ability to develop modem technology for non-smartphone devices, including PCs, IoT hardware and self-driving vehicles.

“This agreement enables us to focus on developing technology for the 5G network while retaining critical intellectual property and modem technology that our team has created,” Intel CEO Bob Swan said in the statement. “We have long respected Apple and we’re confident they provide the right environment for this talented team and these important assets moving forward. We’re looking forward to putting our full effort into 5G where it most closely aligns with the needs of our global customer base, including network operators, telecommunications equipment manufacturers and cloud service providers.”

Apple expects the deal to close in Q4, after being subjected to the standard regulatory scrutiny.

Read more: https://techcrunch.com/2019/07/25/apple-acquiring-most-of-intels-smartphone-modem-business-1b-deal/

telecommunications

Chinas largest chipmaker is delisting from the Nasdaq

The U.S-China trade war is increasingly influencing tech. Huawei has suffered a turbulent past week with key suppliers pausing work with the company, and now China’s largest chipmaker is planning to delist from the New York Stock Exchange.

Semiconductor Manufacturing International Corp (SMIC) announced in a filing published Friday that it plans to delist next month ending a 15-year spell as a public company in the U.S. The firm will file a Form 25 to delist on June 3, which is likely to see it leave the NYSE around ten days later. SMIC, which is backed by the Chinese government and state-owned shareholders, will focus on its existing Hong Kong listing going forward but there will be trading options for those holding U.S-based ADRs.

In its announcement, SMIC said it plans to delist for reasons that include limited trading volumes and “significant administrative burden and costs” around the listing and compliance with reporting.

What it doesn’t say is that this is linked to the frosty relationship between the U.S. and China, and already the company has played that rationale.

“SMIC has been considering this migration for a long time and it has nothing to do with the trade war and Huawei incident. The migration requires a long preparation and timing has coincided with the current trade rhetoric, which may lead to misconceptions,” a spokesperson told CNBC.

Still, it is impossible to ignore the current context. Huawei’s entry to a U.S. blacklist has paused its relationship with key suppliers including ARM, Qualcomm, Intel and Google, which supplies the Android OS for its phones, so SMIC’s decision to remove its financial links to the U.S. fees into fears of a bifurcation of U.S. and Chinese tech, deliberate or not.

SMIC’s shares dropped 4 percent in Hong Kong on Friday. Trading of its U.S-based ADRs crossed one million on Friday, that’s well above an above 90-day volume of nearly 150,000 per day.

The company is China’s largest chip firm, specializing in integrated circuit manufacturing with clients such as Qualcomm, Broadcom and Texas Instruments. SMIC made a profit of $746.7 million in 2018 on revenues of $3.36 billion. Its most recent Q1 results released earlier this month saw revenue fall 19 percent year-on-year.

There has always been tension around Chinese companies using U.S. public markets to go public, and not just from an American standpoint. Chinese companies are increasingly exploring other options, including Hong Kong — where Xiaomi went public last year — while a-soon-to-launch ‘science and tech’ board in Shanghai is hotly touted as an alternative destination.

The board launches in pilot mode next month, but already Chinese bankers and tech companies have found it challenging to deliver on expectations, as a Reuters report earlier this year concluded.

Read more: https://techcrunch.com/2019/05/24/smic-nasdaq-delisting/