Intel offloads XScale processor unit

Intel's reorganisation continues with the sale of its comms and apps processor business

Intel has sold its communications and application processor business to the Marvell Technology Group for $600m.

The group's flagship product is the XScale processor for high-end mobile phones and PDAs. The group's 1,400 employees are expected to join the new owner.

Intel will keep manufacturing current and future models of the mobile processor until Marvell has arranged for other manufacturing resources.

Intel is undergoing a major reorganisation as it looks to "deal with non-performing business units", the company's chief executive Paul Otellini said in April. 

The XScale group is generally considered one of the underperforming business units, as Intel has been struggling to sell the chips to mobile phone manufacturers.

But the sale raises questions about Intel's future strategy for mobile communications and devices, according to senior In-Stat analyst Jim McGregor. 

"The biggest impact is how it affects Intel's long-term strategy for mobile communications," he told vnunet.com.

"Without that cellular technology in house, they would have to license it from Marvell or somebody else if they want to have a total connected solution for mobile PCs in the future."

Intel needs a converged mobile chip for its portable devices such as the Ultra Mobile PC.

Although the chipmaker could be betting on WiMax to provide broadband connectivity for such devices, the technology will not be widely available for a number of years.