Samsung Electronics will buy the handset connectivity and location chip development operations of UK chip maker CSR for US$310 million, the companies said on Tuesday. Samsung aims to strengthen its application processor platform with the acquisition. CSR will also transfer some of its Wi-Fi, Bluetooth and GPS patents to Samsung, CSR's CEO said.
CSR will identify the 21 transferred U.S. connectivity patents, and their international counterparts, when the transaction closes in about three months, CSR CEO Joep van Beurden said in a conference call to discuss the deal. "The patents are relevant to the area that Samsung wants to compete in," he said. Samsung will license the patents back to CSR on a royalty-free basis.
The 21 transferred patents are only part of CSR's portfolio, which consists of over 2000 patents, Van Beurden said. CSR will grant Samsung a world-wide, perpetual, royalty-free, non-exclusive license of its other patents used in handset connectivity and location products, the company said.
"We have great IP. That was one of the reasons Samsung was so interested in us," he said.
Through the acquisition, Samsung will strengthen its application processor platform, the company said in a news release.
Wireless connectivity is becoming more important in the smartphone and tablet market, Samsung said. By buying CSR's Bluetooth, Wi-Fi, FM and GPS technologies, Samsung intends to optimize connectivity for its proprietary application processor family, Exynos, and to establish broader wireless connectivity for mobile applications, it said.
CSR's handset business unit has developed technology that includes noise cancellation software and noise reduction chips for mobile phones. The company also developed a system called SiRFstarV that tracks multiple navigation satellite systems for better outdoor performance and combines that technology with Wi-Fi positioning that can be used for indoor navigation. Besides that, CSR's handset portfolio includes chips offering various combinations of Bluetooth, FM radio, Wi-Fi and GPS functions.
CSR said it will retain its existing handset connectivity and location products and the associated revenue, together with rights to use future connectivity and location technology.
In total, 310 CSR employees will transfer to Samsung, including 25 percent of the company's R&D team, Van Beurden said.
Keeping 75 percent of the R&D team will allow CSR to continue development in five high growth areas: voice and music; automotive infotainment; indoor location, imaging and Bluetooth Smart, said van Beurden. Bluetooth Smart is a new Bluetooth standard that enables ultra low power connectivity and basic data transfer for applications previously limited by the power consumption. The technology is used in GPS watches and game controllers, among other devices.
CSR also develops audio processing technology that can be used in mobile phones, consumer headsets and professional audio systems, including chips that provide noise cancelling for low-cost mono headsets, mono speakers and speakerphones. For the camera market the company develops connectivity and location features, from wireless photo transfer to geo-tagging, with chips that support Wi-Fi DirectTM, Soft AP and Wi-Fi tethering.
Samsung will pay $34.4 million for a 4.9 percent stake in the company, CSR said.
It is not the first European chip operation that Samsung has acquired this year. Samsung bought Swedish wireless chip company Nanoradio in January. Nanoradio develops energy-efficient chipsets for Wi-Fi. The chipsets can be used in smartphones, tablets, mobile gaming terminals, portable multimedia players, digital cameras and e-readers. If Samsung integrates Nanoradio technology in its chipsets, that could result in longer battery life for Samsung devices, Nanoradio said at the time.