Intel to buy DSP Communications for $1.6B

Intel is expanding its empire again, this time with the acquisition of DSP Communications, which makes digital cellular communications products that Intel believes will play a key role in high-speed internet connectivity.

Within the next five business days, Intel intends to buy DSP Communications (DSPC) stock in an all-cash deal worth about $1.6 billion, Intel said in a statement yesterday.

If the deal meets regulatory and DSPC shareholder approval, DSPC will operate as a wholly owned subsidiary and will report to Intel's Computing Enhancement Group. DSPC employees will keep their jobs and the subsidiary would maintain its product line and existing contracts with customers and manufacturers, Intel said.

The acquisition is important to Intel's goal to "become the leading building block supplier to the internet," company officials said. The company cited the growing use of cellular telephones globally, along with increased reliance on cellular voice and data applications and the emergence of cellular broadband networks.

DSPC's customers are cellular handset makers. The California-based DSPC supplies chipsets, reference designs, software and other technologies including PDC (personal digital cellular), TDMA (time division multiple access), CDMA (code division multiple access) and 3G (third-generation) wireless.

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