The world's largest manufacturer of semiconductor products,
) recently announced a deal with
Creative Technology Ltd.
) subsidiary ZiiLabs worth $50 million. The transaction is
expected to be completed by the end of the year.
The deal involves payment of $30 million for asset acquisition
of ZiiLabs Limited, formerly known as 3DLabs, and the remaining
20 million for licensing patents with relation to ZiiLabs' GPU
ZiiLabs is a UK-based subsidiary of Creative Technology
focusing on system on chip (SoC) designs for smartphones and
tablets. ZiiLabs GPU technology supports full profile Open
Computing Language (OpenCL), which Intel has begun to integrate
into its own GPU architecture.
OpenCL is a framework for writing programs that execute across
heterogeneous platforms consisting of central processing units
(CPUs), graphics processing units (GPUs), and other processors.
It improves speed and responsiveness for a wide spectrum of
applications in numerous market categories from gaming and
entertainment to scientific and medical software.
Though Intel has made significant strides with its integrated
graphics technology in notebook/ultrabook as well as in the
tablet form factor, the company is still dependent on PowerVR IP
from Imagination in the smartphone space.
The deal will help Intel in getting more powerful integrated
graphics processing technology, and hence limit its dependency on
Imagination Technologies' PowerVR products. It will also help
Intel to better compete with
), Samsung and
) in the low-power SoC market.
According to Global Industry Analysts, Inc. (GIA), global
market for SoC is estimated to reach US$48.8 billion by the year
2017. Market growth is expected to be driven by encouraging
developments in the field of multiple systems on a chip and
increasing Internet-centric applications of SOC, such as in
networking and data storage systems.
Intel is best known as a chipmaker and remains well positioned
in the server segment. Graphics are also very important in all
areas of computing, from high end gaming PCs to low end
smartphones. The deal will be important for Intel's mobile
strategy going forward.
Intel shares carry a Zacks #3 Rank, implying a short-term Hold
(CREAF): ETF Research Reports
INTEL CORP (INTC): Free Stock Analysis Report
NVIDIA CORP (NVDA): Free Stock Analysis
QUALCOMM INC (QCOM): Free Stock Analysis
To read this article on Zacks.com click here.