Sorry if this has been posted
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In terms of the R&D know-how Intel is getting its hands on, the deal's value is
pretty comparable to the price paid for Level One. At the end of last year, DSP had
230 employees, including 164 involved in R&D. Based on the $1.6 billion purchase
price, Intel is paying about $9.7 million per engineer. On the other hand, Level
One's 271 engineers fetched $8.1 million apiece based on the company's $2.2
billion price tag. Obviously, top-notch expertise in cutting-edge technologies doesn't
come cheap, and Intel has proven this year that it is willing to pay up to get in on
what it feels will be the dominant technologies in the not-too-distant future.
The financial details of the deal aside, perhaps the most intriguing aspect of today's
news is what the combination of Intel and DSP will mean down the road for current
market darling Qualcomm (Nasdaq: QCOM), which has established itself as the
CDMA technology leader. Currently, DSP's products are really the only alternative
to Qualcomm's CDMA chipsets. With the competition's breath now much stronger
on its back, Qualcomm's shares slipped a tad this morning.
Qualcomm definitely has a large head start in the CDMA area, as DSP has only
rounded up five CDMA customers so far. But as the global wireless industry
transitions to 3G and embraces new technologies such as Wideband-CDMA,
Intel's enormous financial resources could make the competition interesting. If they
haven't already, technology investors should dial up this industry and pay close
attention.
From MF
fool.com |
