LSI to Sell Mobility Products Unit to Infineon

LSI Corp., as part of an ongoing restructuring, is selling its mobility products business to Germany's Infineon Technologies AG for $450 million in cash. The deal also includes a performance-based payment of up to $50 million due in Q1 2009. The unit, which designs semiconductors and software for cellphones and satellite digital radio applications, generated $186 million in revenue in H1 2007. "The sale of our mobility business will allow us to further focus our efforts on attractive market opportunities in storage and networking, where we have a strong presence, significant differentiation and the scale needed to be successful," said CEO Abhi Talwalkar. As part of the deal, 700 LSI employees will join Infineon's communications solutions unit. The sale was decided upon in the course of a strategic review LSI conducted in April following its $4 billion acquisition of Agere Systems. Two months ago, LSI announced it is selling its consumer video chip business to Magnum Semiconductor. In related news, LSI said its board has authorized a repurchase of up to $500 million in stock.

Sources: Press release, MarketWatch, Thomson Financial, TheStreet.com, Bloomberg
Commentary: Infineon's iPhone Win and Broader Vendor Base Point in Right Direction • Infineon: A Big Winner In iPhone • LSI Falls to Loss on Post-Merger Charges
Stocks/ETFs to watch: LSI, IFX. Competitors: STM, TXN. ETFs: BDH
Earnings call transcripts: LSI Logic Q2 2007, Infineon Technologies F3Q07

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