Intel lags mobile Internet shares in violet light

April 2, Shenzhen, Intel (34.27, 0.80, 2.39%) China regional President Yang said Intel has adjusted the focus of global industrial cooperation and will invest more innovative resources in Shenzhen.

This is a delicate moment for global chip giant Intel. Although the company does not need to face life and death for the time being, every decision at the moment may push it to the brink of life and death.

In the mobile internet age, Intel has been in a slump-the Wintel portfolio that once ruled the IT industry in the PC era has been marginalized, and Microsoft and Intel have all opened the way to catch-up.

September 26, Intel announced that it would invest 9 billion yuan in its holding company, which holds the communications and RDA Microelectronics, with a 20% per cent stake.

High Premium stakes, what does Intel intend? Everyone says the Prism event is the beginning of a nightmare for American companies in overseas markets, but for Intel it may be an opportunity.

High Premium Shares in Violet

At the acquisition price, Intel's valuation of the two companies is $7.5 billion, a premium of 178%.

September 26, Intel announced that the company signed a series of cooperation agreements with Tsinghua Violet to jointly develop mobile solutions based on Intel architecture and communications technology to expand the products and applications of Intel architecture mobile devices in China and the global marketplace. At the same time, Intel will invest 9 billion yuan in its holding company, which holds the communications and RDA Microelectronics, with a 20% per cent stake.

The bosses on both sides say "yes".

Intel CEO Division said that China is the world's largest smartphone consumer market, and the cooperation with the Tsinghua Violet is a milestone for Intel.

Zhao Wei, chairman and president of Violet Group, said that the development of integrated circuit industry has risen to the national strategy, which covers a wide range of aspects from design development to marketing and capital operation, showing Intel's confidence and commitment to the Chinese market, and will also promote the progress of China's semiconductor technology.

Behind this happy business partnership is Intel's high premium.

According to the company's public information, the exhibition and RDA are two leading chip design companies in the country, developing mobile chipset platforms for smartphones, feature handsets and other consumer electronics products that support the 2G, 3G, and 4G wireless communications standards.

Both companies had previously been listed on Nasdaq. Violet had nothing to do with chip products, July 2013, the purple Light group spent 1.78 billion of dollars to buy the exhibition, this July and 910 million U.S. dollars to buy RDA. After the acquisition, Violet has become the mainland chip design industry's absolute eldest.

According to Intel's purchase price, it gives the two companies a valuation of 7.5 billion U.S. dollars, about 46.5 billion yuan. The two companies only spent 2.69 billion dollars. The two-chip design companies add up to an annual revenue of about 1.3 billion dollars.

Intel gives a 178% premium.

Intel pays for Mistakes

Chip architecture "wrong" road, on the mobile operating system, Intel has the wrong PO.

Not only is this high premium a share of the violet light, Intel has been sending frequent "proximity" signals in the Chinese market since 2013.

Since the second half of 2013, Intel and Shenzhen have been closely linked to a number of small manufacturers, in addition to the 15-dollar "ultra-low cabbage price" to provide chips, intel in support of small manufacturers to launch a tablet products also spared no effort. Even Intel's top executives are frequently visiting Shenzhen, where they are flattered by the direct meeting with small-business owners. You know, some of these small manufacturers, is not a brand of grassroots companies.

Intel's unusual behavior is that it realizes its own historical error, which is throwing intel at the heart of world technology.

On the eve of the mobile internet outbreak in June 2006, Intel felt that the arm-series processor was not making money and sold the arm-series processor to Marvell at a price of $600 million. At the time, networked terminals were PC-dominated, mostly based on the Intel-led x86 architecture. Since then, the mobile internet wave has brought about a dramatic change in the industrial landscape. In the 2012, the network terminal became a smartphone, tablet computer and other intelligent terminals, arm chip accounted for about 75%.

Chip architecture "wrong" road, on the mobile operating system, Intel has the wrong PO. When Android was already clearly in the mainstream, Meego with Nokia for more than a year.

It is too late for Intel to come back to support Android. Most of the programs on the market are based on ARM processor development and Intel is marginalized. At the beginning of 2012, Intel announced that it was moving into the mobile chip industry, although some handset products were launched with Lenovo and other manufacturers, but they did not get a large volume of shipments at the end.

There are comments that Intel is facing a vicious circle. Poor compatibility brings poor performance, poor performance does not attract users to buy, the number of users has caused developers unwilling to improve compatibility, improve performance. So compatibility is worse, Intel is stuck in a dead loop in the Mobile world.

In 2013, Intel adjusted its thinking and began to tap the tablet market as a major force in the market to move into the mobile market. and set 40 million of the delivery target. The only one is to get the fastest and cheapest Android devices using Intel processors into the hands of consumers, first on the mobile market. Intel is willing to lose money to make sales.

China Market brings up opportunities

With the market support of the exhibition and RDA, plus the policy Dongfeng, Intel has more possibilities for this turnaround.

Now the bigger chance is coming.

The 2013 "Prism event" erupted, the incident continues to evolve, the media, including German Chancellor Angela Merkel and other government dignitaries of the phone have been the United States to monitor the. The incident has left governments fearful of the lack of technology for mobile phone communications chips.

China has also raised information security to national security levels. On the eve of this year's two sessions, the Central network security and Information Technology leadership group was proclaimed.

According to media reports, the security of the communications chip is placed in the first position. Qualcomm, the global communications chip giant, is mired in "antitrust" in China.

At the same time, the central government and local governments are introducing policies to support the development of integrated circuit industries. September 25, Xu Xiaodian, executive vice president of China's Semiconductor industry Association, said in Shanghai that the national Integrated circuit Industry Investment fund will be set up recently and the fund is up to 120 billion yuan a year. And Beijing, Anhui, Tianjin and other local governments have issued integrated circuit support advice, through the establishment of investment funds, focus on supporting local leaders in the integration of integrated circuits bigger.

This June, the State Council formally approved the release of the implementation of the "National integrated circuit industry Development platform", which proposed that by 2015 China's integrated circuit industry sales income of more than 350 billion yuan. Compared with the 250.8 billion yuan in 2013, it grew nearly billions.

A person close to the purple Light group said that the purple is the Ministry of Education in charge of enterprises, according to the "platform", the government will support the excellent domestic enterprises, according to a number of indicators, Violet can win policy support.

Insiders said that from a policy perspective can explain why the violet light in this time point to the chip industry for a large-scale acquisition. and further deduction, at this time Intel High premium shares the purple light, can declare Intel's "China Attitude", dissolve the potential market risk, and can borrow the government's policy support, expand the Chinese market, while hedging competitors Qualcomm (75.19, 1.68, 2.29%), is more than a swoop.

At present, China has become the world's largest smartphone market. According to a new study published by Strategy Analytics, a market research institute, the first quarter of 2014, when Qualcomm was the first in the global baseband chip market, with a 66% per cent revenue share, MediaTek and the show were followed by a share of 15% and 5%. Marvel and Intel are the fourth and fifth names.

With the market support of the exhibition and RDA, plus the policy Dongfeng, Intel has more possibilities for this turnaround.

Change the market with technology

Sources say Intel's cooperation with the Tsinghua Violet is also a measure of Intel's response to "nationalization".

One concern is how Intel convinces the Violet light to join the "homemade" feast.

Intel company related Personage told Beijing News reporter, under the terms of the agreement, the exhibition Communications will jointly develop and sell a series of Intel architecture based system chip products. The first batch of Intel architecture based system chip products will be listed in the second half of next year, and two companies with their own brands jointly sold.

In other words, Intel will be the current mobile phone chip to the exhibition design and sales, that is, Intel's current mobile communications team to do, there will be a large number of later by the exhibition to take over, and the production of the chip will be the exhibition of the logo.

In addition, there is news that Intel's collaboration with the Tsinghua Violet is more than just a cell phone chip, and that the collaboration will include server chips and PC CPUs, a measure of Intel's response to "nationalization".

Intel China President Yang has previously said that Intel must "participate" in the growth of Chinese companies in the future.

Intel company sources said that the current future of Intel and the production of Intel architecture chip differentiation has not been announced, but it can be determined that Intel did not give up research and development, the two sides will exchange, Intel provides technical support.

In short, Intel is looking for "technology for market".

According to the policy reading published in the People's Daily, the government has to set up investment funds to do a strong "China core" because the integrated circuit industry is capital-intensive industry, the need for long-term, large-scale financial support. The article said that China's "chip-software-machine-system-information services," the industry chain synergy Pattern has not yet formed, such as chip design companies mostly put high-end products in overseas manufacturing. Technically, we still have a number of technical gaps in general integrated circuits such as general-purpose CPUs, memory, microcontrollers and digital information processors, and some high-end dedicated circuits.

Wenjun, a chief analyst at Isuppli Semiconductor, believes that by working with Intel's deep strategy, Violet can not only be licensed by Intel-related technology, but also supported by such an international giant, with a strong " The resources of teachers and friends "are of great significance to their internationalization."

Will the future give up the arm architecture and move on to Intel architecture?

Purple Light group related personage said, the matter is not the simple or either, needs the market examination.

(Responsible editor: Lvguang)