LSI to Sell Mobility Unit to Infineon

Chip maker LSI Corp. has agreed to sell its mobility products division to Infineon Technologies AG for US$450 million in cash, plus a possible additional $50 million if the unit meets certain performance goals.

The deal is part of LSI's attempts to revamp its business after merging with Agere Systems Inc., LSI said in a statement on Monday. The Milpitas, California company plans to focus on storage and networking going forward.

The LSI Mobility Products Group designs semiconductors and software for cellular phones, in addition to chips for satellite digital audio radio devices.

The deal will strengthen Infineon's ability to sell communications chips at major mobile phone companies, the German company said. Infineon decided last year to spin-off its DRAM (dynamic RAM) operations into a new company, Qimonda AG, in order to focus more on communications chips. Qimonda is one of the world's largest memory chip makers.

The deal still faces regulatory and other approval before being finalized.

Once the deal closes, 700 LSI workers will join Infineon as part of its communications solutions business group. Infineon and LSI will also enter into intellectual property, transition services and supply agreements as part of the agreement.