Intel (INTC) is securing its dominant position as a chipmaker with a new deal. The Santa Clara- based company has confirmed its plans to acquire eSAIC, a fabless company focused on making customized chips. Intel, however, did not reveal the value of the deal and said it expects to seal this deal during the third quarter of this year.
As a part of the deal — that helps Intel cut its increased dependence on CPU chips —, the team of 120 employees including the CEO Ronnie Vasishta would be absorbed by the chip giant Intel. The team would be a part of Intel’s internal department called programmable solutions group, which was formed after Intel acquired Altera in 2015.
eSAIC is known to offer structured application-specific integrated circuits (or ASICs), products and services. With the help of these structured ASICs, Intel can strengthen its position in the market segments like 4G and 5G wireless, networking and IoT.
In 2015, eSAIC was eyeing to go public. The company planned to raise $75 million through its IPO, but later withdrew its plans. That year, the company had reported revenues of $67.4 million and a net loss of $1.1 million.
This deal comes at a time when Intel is struggling for its future, considering it recently lost its CEO Brian Krzanich, unexpectedly. Plus, Intel is set to lose out business from Apple (AAPL). Early this month, it was reported that Apple will not use Intel’s 5G modems for its 2020 iPhones. Although sales to Apple constitute a small portion of Intel’s overall revenue, this loss would be a major blow to the chipmaker.