ADI in talks to sell its wireless chipset division, analyst reports

By Colleen Taylor, Contributing Editor -- Electronic News, 7/11/2007

Massachusetts-based Analog Devices Inc.'s (ADI) is reportedly in talks to sell its wireless chipset division, according to a research note sent Tuesday by American Technology Research's  Doug Freedman.

Wireless chipsets represented 9 percent, or about $238.7 million, of ADI's 2006 sales. In his research note, Freedman said he believes that the segment was likely losing money, and that ADI has underinvested in R&D "for some time."

According to a report published last week in Taiwan's Economic Daily newspaper, Taiwan-based fabless IC maker MediaTek Inc. is currently the frontrunner in talks to acquire the segment.

Now could be a key time for an Asia-based company to adopt ADI's  wireless segment, as China is currently in testing of a new 3G mobile communications standard to deploy in time for the 2008 Olympic games there. Freedman said that the rumored acquisition would make sense for MediaTek, as it would give the company a "leg-up" on entering the emerging 3G TD-SCDMA mobile market in China. "We believe it is prudent for ADI to sell the wireless division ahead of the impending volume ramp in China as 3G equipment is deployed," Freedman said in Tuesday's note.

And MediaTek is not the only company that could be in the running to acquire ADI's wireless division. "We believe other likely buyers could emerge including homegrown China-based fabless companies backed by the government," Freedman said.

When contacted for further information on the possible sale, a representative for ADI told Electronic News that the company "doesn't comment on rumors." MediaTek could not be reached immediately for comment.