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It appears Cortina Systems will purchase and operate the communication semiconductor assets of Intel (NASDAQ:INTC). Eric Savitz at Barrons has confirmed the rumor, an announcement is forthcoming September 11th.

Cortina is a privately owned company that designs and sells communication semiconductors to Telecom equipment manufacturers. They lack the capital assets to make such a purchase, and have obtained funding from outside sources.

My initial reaction is mild disappointment. I was hoping the divestiture of the Intel assets would trigger much needed consolidation in the Comm Semi industry (see Intel Price-Cutting).

I am hopeful that this is the first of several acquisitions to be made by a consortium of investors, led by Cortina.

At this time I do not know exactly what components were sold and what price was paid. It is also unclear where the optical module assets of Intel will land, though I expect either Finisar (NASDAQ:FNSR) or Avago to purchase those.

Source: Disappointment from Intel's Communications Semi Unit Sale