Intel Discontinues Some Chips for Mobile Devices

By Don Clark 

Intel Corp. is discontinuing some of its chips for mobile devices, the latest sign of a recent strategy shift to focus on fields where it is more likely to make money.

The Silicon Valley company no longer plans to sell three products in a line of multifunction chips called SoFIA that target smartphones with a combination of cellular modem and processor functions. Intel also won't sell a version of its Atom processor line, code-named Broxton, that was aimed at tablet computers.

Kathryn Gill, an Intel spokeswoman, on Friday confirmed the changes, which were first reported in an article by semiconductor market analyst Patrick Moorhead on the Forbes website.

Intel has tried for years, and mostly failed, to gain a major foothold in chips for smartphones and tablets. At the same time, it has suffered from a continuing decline in the personal computer business, its largest source of revenue.

The company on April 19 announced plans to cut 12,000 jobs, or 11% of its workforce, as part of an effort to shift resources to chips for server systems and other businesses where revenue growth is more likely.

Chief Executive Brian Krzanich followed up on Monday with a blog post that emphasized his focus on products for the data center, memory chips, programmable chips known as FPGA and segments of the market known as the Internet of Things.

Intel's mobile efforts have been hampered by delays in matching companies like Qualcomm Inc. in introducing new wireless technology. Two of the canceled SoFIA models used the fourth-generation cellular technology called LTE, while the other used older 3G technology.

"By the time that those hit the market, they weren't competitive as they needed to be to sell them at the prices they wanted," Mr. Moorhead said.

Mr. Krzanich emphasized the company would continue to develop products to try to lead the industry's transition to 5G technology.

"Our connectivity strategy includes increased investment in wired and wireless communications technology for connecting all things, devices and people to the cloud and to power the communications infrastructure behind it," Ms. Gill said. "We re-evaluated projects to better align to this strategy."

Some of the SoFIA products were being produced under alliances with Chinese chip companies Fuzhou Rockchip Electronics Co. and Spreadtrum Communications Inc.; Ms. Gill said those companies remain "valuable partners."

But she added that Intel's strategy requires "developing solutions at Intel as well as with key partners."

Write to Don Clark at [e-mail]

(END) Dow Jones Newswires

April 29, 2016 20:14 ET (00:14 GMT)

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