Intel acquires Avago networking business for US$650m

The purchase will help Intel provide more chips to mobile-phone service providers and expand its ability to win sales. — Reuters pic
The purchase will help Intel provide more chips to mobile-phone service providers and expand its ability to win sales. — Reuters pic

SAN FRANCISCO, Aug 14 — Intel Corp, the world’s largest computer-chip maker, agreed to acquire Avago Technologies Ltd’s Axxia networking business for US$650 million (RM2 billion).

Intel is paying cash for the unit, which generated US$113 million in revenue last year and employs about 650 people, Singapore-based Avago said yesterday in a statement.

The purchase will help Intel provide more chips to mobile-phone service providers and expand its ability to win sales in what it predicts will be a US$16 billion market, according to an online statement by Rose Schooler, a vice president of the company’s Data Centre Group.

Santa Clara, California-based Intel is getting a greater proportion of its server sales from makers of networking gear and storage equipment as those industries look for ways to reduce costs by using cheaper Intel chip-based servers and depending less on expensive networking equipment.

Intel shares rose 2.9 per cent to US$34.10 at yesterday’s close in New York. They’ve gained 31 per cent this year. — Bloomberg

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