Infineon Technologies AG reported results for its fiscal fourth quarter as well as the whole 2011 fiscal year ended September 30, 2011, and what investors took away from the report is that 2012 isn't looking so hot. Infineon said it expects a sequential revenue decline of about 10 percent in the first quarter of 2012, and an unspecified single-digit percentage drop for all of 2012 relative to the 2011 fiscal year.
Having just spent nearly $8 billion acquiring security firm McAfee, reports are starting to surface that Intel, the world's largest chip maker, is now eying up Infineon Technologies AG's wireless unit, Bloomberg reports.
"Intel's big strategy is to be at the heart of computing everywhere," said Alex Guana, an analyst at JMP Securities LLC in San Francisco. "The McAfee acquisition helps make that a secure equation and a potential Infineon acquisition would give them inroads into the mobility space."
If Infineon sounds at all familiar, that's because they're the ones who produce processors for Apple's iPhone and Samsung's Galaxy S smartphones. Infineon ranks as Europe's second largest chip maker, and an acquisition of its wireless business would cost Intel about $1.91 billion, according to "two people familiar with the talks." Think about that for a moment. Should this go through, Intel will have spent close to $10 billion in less than a month snatching up companies and businesses to beef up its mobile strategy.
If Intel had its way every single device on the planet would be powered by one of its processors, but one thing is holding them back from world domination, namely their dependence on x86 architectures. ARM Processors have proven to be the faster and more power efficient design for mobile up until now, leaving Intel to spectate jealously from the sidelines. So how will Intel find its way inside some of the most coveted consumer devices on the planet? Well, if recent rumors are true than a few billion out of the war chest to buy Germany-based Infineon might just do the trick.
Infineon chips show up in mobile products from Nokia, Samsung, and even Apple which power everything from the 3G radios to the interface chips for high resolution cameras. These critical pieces of hardware don’t get the same level of press as the A4, but are just as important to the final package. Perhaps the most interesting aspect of this story is that Intel is more or less buying back technology that they invented and sold off to Marvell back in 2006.
Intel has a fair bit of work to do before it can become entrenched in mobile platforms, but an acquisition of Infineon would be a positive first step buying them a valuable chunk of PCB real estate inside the iPad and iPhone 4.
Thirty-three states, including California, Florida, Massachusetts, New York, Pennsylvania, and others, will receive $173 million from six DRAM makers to settle a suit accusing them of fixing prices for products between 1998 and 2002. Companies named in the suit include Micron, NEC, Infineon, Hynix, Elpida, and Mosel Vitelic.
"These companies conspired in an illegal global scheme to fix prices on chips used in computer equipment sold to consumers, schools, and government offices," California Attorney General Edmund 'Jerry' Brown Jr. said in a statement. "The large price tag of this settlement should serve as a warning that we will crack down on any manufacturers around the world that choose to gouge consumers through illegal price-fixing schemes."
It is yet to be determined how much each company will pay towards the $173 million collective settlement, which is to be doled out over the course of two years plus interest to the affected consumers, schools, and government offices.
"The settlement money is welcome, but the illegal overcharging never should have happened in the first place," Brown added. "Especially when times are tight, schools and government agencies can't afford to be ripped off by companies that violate our anti-trust laws to keep profits high."
Following an extensive investigation into alleged price fixing violations, the European Commission found nine memory makers guilty of wrongdoing and fined them a collective $404 million.
The companies involved include Samsung, Infineon, Hynix, Elpida, NEC, Hitachi, Toshiba, Mitsubishi, and Nanya, all of which submitted settlements admitting their liability for infringement, according to reports. Micron would also have been included, but ultimately was not fined since it told the Commission about the cartel as far back as 2002.
"You may think that to use the word 'settlement' next to the word 'cartel' sounds quite strange," Almunia said. "So let me explain right away that we are not compromising on cartels, with or without a settlement. A cartel is the worst violation of competition rules since its object is to collude against the interests of other companies and of consumers."
Samsung received the biggest fine at $145.7 million, with Infineon receiving the second largest fine at $56.7 million. The cartel is said to have operated from July 1, 1998 and June 15, 2002.