Device

Rumor: CEC intends to acquire Marvell mobile phone chip business

Updated:2015/1/7 10:03

"CEC (China Electronics Corporation) is planning to acquire Marvell mobile phone chip business." An informed source told the reporters on January 5th, "CEC raised funds by itself, and the two sides are still negotiating on the acquisition price and form."

The reporter consulted Marvell China and CEC, but Marvell didn’t give any reply at press time, and Publicity Department of CEC said on the phone: "there is no such thing."

However, many insiders told the reporter that the negotiations between CEC and Marvell mobile phone business department have been discussed for nearly six months, which is mainly promoted by the Shanghai municipal government and invested by CEC, while the investment banks of USA also hope Marvell can sell its mobile phone business.

General Secretary of CNMO Wang Yanhui told the reporters that after Spreadtrum and RDA were successively acquired by Tsinghua Unigroup, Shanghai's largest chip design companies both become Beijing companies, therefore Shanghai needs to create a new leading enterprises, so as to promote the development of the entire chip industries in Shanghai. On the other hand, Marvell maybe also needs more market and policy supports from China.

CEC has subsidiary integrated circuit enterprises like Shanghai Huahong and Shanghai Belling, which are both subordinated to Shanghai. In November 2014, CEC together with PDSTI acquired Montage Tech, a Shanghai chip company which is listed in the USA.
Wang Yanhui believes that Marvell's achievement in 4G is mainly because it seized the window period, but now 4G chips of MTK and Spreadtrum are already available. In this year, Marvell will face the two powerful competitors, but its response speed to the market may be limited.

As we have learnt, 4G chip shipments of Marvell exceeded 20 million in 2014. But MTK caught up and surpassed Marvell, with over 30 million shipments of 4G chips.

"About half a year ago, rumor goes inside the industry that CEC and Marvell are making cooperation, and the Shanghai government also participates in it." Wang Yanhui told the reporters: "Shanghai wants to recreate a leading enterprise by Marvell." This is a win-win arrangement, Marvell can get more market and policy supports from China, and can respond more quickly to the market demands; on the other hand, Shanghai can promote the development of local industries by adopting the technical strength of Marvell, while CEC can make profits as the main investor.

Wang Yanhui said: "Both sides haven’t got clear results. Progress in the next step is believed to mainly depend on Marvell, if it is confident to manage its mobile phone chip business alone, then it may be difficult to make a deal. But if Marvell wants to extensively adapt to the Chinese market, this is probably the best cooperation scheme."

 Source:c114
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