LONDON: Samsung Electronics has bought chipmaker CSR's mobile phone connectivity and location technology for $310 million in a deal that strengthens the South Korean company's smartphone platform and patent portfolio.
CSR's chief executive Joep van Beurden said the British firm's Bluetooth, WiFi and location technology was cutting edge, but it was losing ground in smartphones to bigger rivals who were combining more functions in a single platform.
"There is a big war going on between the giants of the semiconductor industry like Qualcomm, Intel and Samsung LSI to deliver the complete solution into smartphones," he said in an interview on Tuesday.
"Our team and technology location and connectivity is in its own right an extremely important part of that platform, but it is even more important if it completes your product offering and that is exactly what Samsung is doing."
Shares in the Cambridge-based group jumped 39 percent to a 12-month high of 302 pence, as analysts welcomed CSR's exit from the handset market.
"Disposing of the handset business where CSR has been struggling to remain competitive looks to be a good move," said Singer Capital Markets.
Samsung said the deal would add more capability to its platforms featuring the application processors that power the world's most popular smartphones and tablets - Apple's iPhone, iPad and its own Galaxy products.
"By leveraging CSR's R&D capability, Samsung will strengthen its application processor platform and solidify its position as a leading semiconductor solutions provider," said Stephen Woo, Samsung's president of System LSI Business, Device Solutions.
Brian Park, semiconductor analyst at Tong Yang Securities, said that up to now Samsung's growth in the mobile sector was driven by its strength in memory chips.
"With this development, Samsung has set up a foundation to bolster its non-memory capabilities," he said.
"Access to CSR's patents could also serve as a buffer in future patent disputes." Samsung and Apple are waging legal battles in about 10 countries, accusing each other of patent infringement as they vie for supremacy in the mobile device market.
The company tops the mobile apps processor market in terms of revenue, controlling 72 percent in the first quarter, followed by Texas Instruments with 12 percent and Qualcomm with 9 percent, according to data from Strategy Analytics.
CCS Insight analyst Geoff Blaber said Samsung's move came hot on the heels of the acquisition of Nanoradio, a Swedish WiFi chip set company, on June 1.
"It underlines Samsung's commitment to strengthening its vertical advantage by extending silicon capability most notably in WiFi and GPS," he said.
As well as buying CSR's technology and handset team, which numbers 310 employees, Samsung will also invest $34.4 million in a 4.9 percent stake in CSR at a price of 223 pence a share.
It will also take a worldwide royalty-free license of CSR's intellectual property for handsets and 21 US patents that will be licensed back to CSR.
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