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Who wants to buy Marvell's mobile business?

Posted: 07 Aug 2015 ?? ?Print Version ?Bookmark and Share

Keywords:smartphone? chip vendor? mobile? acquisition?

The Chinese government's appetite for semiconductor investment, combined with PDSTI's track record, makes the proposed scenario plausible.

After all, PDSTI last year completed acquisition of Montage Technology Group, a Shanghai-based fabless chip vendor making analogue and mixed-signal semiconductors. In 2013, Shanghai-based PDSTI lost an almost year-long bidding war for RDA Microelectronics against Beijing-based Tsinghua Unigroup.

Leadcore Technology, a fabless chip company wholly owned by China's Datang Telecom Technology and Industry, is an intriguing candidate, considering its close ties with Xiaomi.

Under the deal, some in China are saying that Leadcore may be part of the joint venture, while others speculate that Xiaomi will be one of the shareholders.

Chipset shipment

(Source: Strategy Analytics)

Earlier this year, a Leadcore executive told EE Times that Xiaomi wants its own custom-designed processors to differentiate its products and control its destiny. Instead of building an in-house chip design team, Xiaomi partnered with Leadcore to source the technology. During the one-on-one interview, Leadcore VP Marshal Cheng said Leadcore is working with Xiaomi on "all three different levelsproduct, technology and patent."

The drawback in combining Leadcore and Marvell's mobile business is that "the price war among smartphone chips is already getting red hot," according to one Chinese source. Further, the merger would probably require a year or more of reorganisation, the source said.

In contrast, some in China are floating the idea of a Chinese handset vendor acquiring Marvell's mobile unit. If not Lenovo, what about Coolpad, they ask. Once it starts expanding outside China, Coolpad could surely use some of Marvell's patents.

Marvell's technology

Certainly, Marvell is no Qualcomm or MediaTek. Yet, its technology prowess shouldn't be underestimated. Strauss noted, "Marvell is one of the few modem chip suppliers who have actually fielded LTE modems in shipping tablets (like some of Samsung's) and a few cell phones, so they have excellent technical credibility." But of course, so did Broadcom, Renesas Mobile and ST-Ericsson, who couldn't break into most of the high-end smartphone sockets, namely Apple and Samsung.

Strauss also noted that Leadcore is coming on strong with its LTE modems (based on CEVA DSP cores). Marvell's LTE modems are based on the FRIO DSP core jointly developed by Intel and Analog Devices, he added. Part of the reason why Strauss doesn't see the combination of Leadcore and Marvell as a good fit is that they don't have compatible software.

To be clear, Marvell is seeing the company's 4G LTE as a growth engine. In the latest Q2 financial call last month, Marvell's CEO said:

Specifically in mobile, we continued to see growth across our customer base in 4G LTE and saw double digit sequential unit growth in Q2. During the quarter, we expanded our customer list from tier one OEMs to now include tier two OEMs. We expect new smartphone launches with our LTE solution in the coming quarters and are confident about holding a strong market position in China.

- Junko Yoshida
??EE Times U.S.


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