Intel will acquire analogue semiconductor device maker Avago Technologies LSI's Axxia Networking Business for $650m, to strengthen its chip offering to mobile phone service providers.
Avago had bought LSI for $6.6bbn last December to expand its presence in mobile ecosystem and cloud-based services.
With the acquisition, Intel aims to increase its network efficiency to transform wireless access into a flexible and intelligent network base. According to Intel, wireless access is a significant component of mobile network, which is estimated to represent $16bn of the silicon market segment. This acquisition will help Intel provide better services to networking gear and storage equipment makers.
The Axxia Networking Business generated revenues of $113m during 2013 and has 650 employees.
The $650m acquisition has been approved by both Intel and Avago's board of directors and the deal is expected to close in the fourth quarter of 2014.