Samsung buys British chip unit for $300 mil.

By Kim Yoo-chul

Samsung Electronics, the world’s largest maker of computer memory chips, said Tuesday it reached an agreement to buy the mobile product division of British semiconductor designer Cambridge Silicon Radio (CSR) for $300 million.

Samsung will separately invest $34 million in CSR, which is advanced in technology for chips used in mobile Internet devices like smartphones and touch-screen tablets.

Samsung boasts dual strength in parts and finished products, also being the world’s second-largest liquid crystal display (LCD) maker and the largest provider of flat-screen television and mobile phones. The company is currently locked in a bitter rivalry with Apple in smartphones and tablets, with lawsuits flying left and right between them.

``The deal provides us full access to CSR’s intellectual properties related to mobile devices as well as the license for other technologies and the creative input of 310 software developers the firm has employed. The acquired division will be absorbed within Samsung’s Systems LSI division,’’ said Samsung spokesman Ken Noh.

CSR provides a variety of designs for single-chip wireless devices, including handsets and cameras, which support Wi-Fi, wireless LAN and Bluetooth. It also provides integrated circuit (IC) technologies used in more advanced gadgets. Samsung has already been using CRS’s location-tracking chips in its Galaxy lineup of smartphones and tablets.

The acquisition of CSR’s mobile unit comes months after Samsung took over Sweden’s Nanoradio, drooling over the company’s technologies for enabling Wi-Fi on low-power structures.

Samsung hopes the acquisition of the CSR unit will help expand its business portfolio to more wireless telecommunications solutions and reduce royalty payments for Bluetooth, Wi-Fi and other wireless connectivity technologies used on its mobile.

CSR doesn’t manufacture chips itself, but licenses its patented designs to hardware makers and receives a royalty each time a device containing one of its designs is sold.

``Now, Samsung will be able to add CSR’s Wi-Fi, GPS and other technologies to its Long-Term Evolution (LTE)-enabled smartphone and tablet chipsets. That means users can have a smartphone, tablet and computers that can connect to the networks of their offices,’’ said Noh.

Noh declined to comment whether the deal represents the company’s attempt to be less reliant on Qualcomm, the San Diego-based chip firm.

Last year, Qualcomm bought Atheros Communications in a bid to effectively develop wireless communications as its strategic platform amid explosive demand for smartphones.

``Still, Samsung is paying billions of dollars to Qualcomm in return for using Qualcomm’s competitive chip solutions. The Korean company will eventually want to compete with Qualcomm by flexing its muscle to wireless connectivity platform,’’ said a fund manager from a U.S.-based investment bank in Seoul.

Samsung is using its Exynos-branded mobile application processors to Samsung Galaxy3’s Korean version, while the company still using Qualcomm’s Snapdragon S4 chipsets to the S3’s US version.

``The Samsung move should be the biggest blow to Broadcom ― a semiconductor firm in the wireless and broadband communication business ― as Broadcom lost one of its top clients ― Samsung,’’ said the fund manager.

Interestingly, the CSR acquisition comes after Samsung is involved with patent fight with Apple. The fight awakened the South Korean company for the need to secure patents in business fields should Samsung want to grow, according to Samsung officials.