Intel, Creative Ink $50M Deal - Analyst Blog
24 November 2012 - 3:48AM
Zacks
The world’s largest manufacturer of semiconductor products,
Intel Corp. (INTC) recently announced a deal with
Creative Technology Ltd. (CREAF) subsidiary
ZiiLabs worth $50 million. The transaction is expected to be
completed by the end of the year.
The deal involves payment of $30 million for asset acquisition
of ZiiLabs Limited, formerly known as 3DLabs, and the remaining 20
million for licensing patents with relation to ZiiLabs' GPU
technology.
ZiiLabs is a UK-based subsidiary of Creative Technology focusing
on system on chip (SoC) designs for smartphones and tablets.
ZiiLabs GPU technology supports full profile Open Computing
Language (OpenCL), which Intel has begun to integrate into its own
GPU architecture.
OpenCL is a framework for writing programs that execute across
heterogeneous platforms consisting of central processing units
(CPUs), graphics processing units (GPUs), and other processors. It
improves speed and responsiveness for a wide spectrum of
applications in numerous market categories from gaming and
entertainment to scientific and medical software.
Though Intel has made significant strides with its integrated
graphics technology in notebook/ultrabook as well as in the tablet
form factor, the company is still dependent on PowerVR IP from
Imagination in the smartphone space.
The deal will help Intel in getting more powerful integrated
graphics processing technology, and hence limit its dependency on
Imagination Technologies' PowerVR products. It will also help Intel
to better compete with Nvidia Corp. (NVDA),
Samsung and Qualcomm (QCOM) in the low-power SoC
market.
According to Global Industry Analysts, Inc. (GIA), global market
for SoC is estimated to reach US$48.8 billion by the year 2017.
Market growth is expected to be driven by encouraging developments
in the field of multiple systems on a chip and increasing
Internet-centric applications of SOC, such as in networking and
data storage systems.
Intel is best known as a chipmaker and remains well positioned
in the server segment. Graphics are also very important in all
areas of computing, from high end gaming PCs to low end
smartphones. The deal will be important for Intel's mobile strategy
going forward.
Intel shares carry a Zacks #3 Rank, implying a short-term Hold
rating.
(CREAF): ETF Research Reports
INTEL CORP (INTC): Free Stock Analysis Report
NVIDIA CORP (NVDA): Free Stock Analysis Report
QUALCOMM INC (QCOM): Free Stock Analysis Report
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