Qualcomm (NASDAQ:QCOM) and TDK announced a $3 billion joint venture to produce wireless components for smartphones, tablets and IoT devices.
RF360 Holdings, as the venture will be branded, hopes to couple TDK's expertise in modules and filters with Qualcomm's experience with chips. Qualcomm will take a 51 percent stake in the venture; a TDK subsidiary will hold the remaining 49 percent.
The move marks Qualcomm's latest effort to expand its business to a variety of emerging devices and platforms as growth in the worldwide smartphone market slows. Qualcomm's sales slowed last year, and the company announced plans in July to cut $1.4 billion in costs and slash up to 15 percent of its workforce.
The San Diego-based chipmaker made a series of IoT-related announcements at CES last week, showcasing a new chipset optimized for use in autos and unveiling a networking platform for multiple Wi-Fi-enabled devices in the home. The company also announced a partnership with AT&T, (NYSE:T) Cisco and Ericsson (NASDAQ: ERIC) to develop a new framework for smart cities aimed at improving connectivity within communities.
RF360 Holdings "will enable us to expand our growth opportunity by allowing us to accelerate our strategy to provide OEMs across our business segments with fully integrated systems that will enable them to deliver at scale and on an accelerated timeframe," Qualcomm CEO Steve Mollenkopf said in a prepared statement.
Under terms of the deal, filter and module design and manufacturing assets as well as related patents will be carved out from TDK "and be largely acquired" by RF360 Holdings, with some assets being acquired directly by Qualcomm subsidiaries, the companies said. Qualcomm will provide new capital spending and is expected to exercise an option to acquire the remaining interest in the joint venture after 30 months.
- see this Qualcomm press release
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