Renesas Electronics Corp and Nokia Corp concluded a contract July 6, 2010, that Nokia will sell its wireless modem division to Renesas for a price of about US$200 million.
Through the buyout, Renesas will acquire the design know-how and patents owned by the division. And the division's 1,000 employees who have been working in Finland, India, the UK, Denmark, etc will transfer to Renesas.
Nokia's wireless modem division develops baseband processing hardware and software for mobile communication standards such as GSM, HSPA and LTE. Because Nokia does not have a division that manufactures semiconductors, it has been contracting out the production of chips including baseband processing hardware IPs to a semiconductor manufacturer. The company licensed its baseband processing technologies to Renesas in 2009 and has been developing baseband processors in collaboration with Renesas.
On the other hand, Renesas has been providing semiconductors for mobile phones such as power amplifiers to Nokia. It seems that such business relationship led to the buyout.
Renesas decided to acquire the wireless modem division because it wanted to have its own development division for baseband processing.
"As a company that provides chips for mobile devices, the only thing that Renesas does not have is a development division for baseband processing (for 3G and later)," said Hideaki Chaki, senior vice president and vice president of the 2nd SoC Business Unit of the company.
Though Renesas owns baseband processing technologies for GSM, it has been applying baseband processing technologies provided by, for example, NTT Docomo Inc to its chipsets for 3G and later mobile phones.
"For baseband processing technologies, it is very important to accumulate verification data concerning connectivity," Chaki said. "It is not easy to enter the market just because there are standards. If we tried to enter the baseband processor market from scratch, it would cost 10 times more (than the US$200 million), not to mention the long time we would have to spend."
Renesas plans to provide chipsets developed with Nokia's baseband processing hardware and software mainly to companies outside Japan. It intends to release baseband processors that support LTE and 3G (such as W-CDMA and HSPA) at first and, then, expand the product line to middle-range chips, etc.
"(After the buyout,) there will be only three companies that can provide cutting-edge baseband processors supporting multiple mobile communication standards including LTE," Chaki said. "They are Qualcomm Inc, ST-Ericsson of Switzerland and Renesas. We would like to acquire a market share of at least 35%."
The sales amount of Renesas' mobile business was about ¥100 billion (approx US$1.14 billion) in fiscal 2009. And the company aims to expand the business by using Nokia's baseband processing technologies.
"We would like to quadruple the sales amount by the end of fiscal 2015," Chaki said.
Nikkei Electronics |
Nikkei Monozukuri |
Nikkei Automotive Technology |
|---|---|---|
 |
 |
 |
| The magazine for electronics designers and managers. | Design You Won't Regret - How to Reduce the Risk of Accidents | The comprehensive automotive technology magazine. |
Copyright © 1995-2012 Nikkei Business Publications, Inc. All rights reserved.
All editorial content and graphics on this Web site may not be reproduced in whole or in part without the express permission of the copyright owner.
