Renesas Electronics Corp., a supplier of advanced semiconductor solutions, and Nokia Corp., the world leader in mobile communications, on Tuesday announced that they are deepening their collaboration by forming a strategic business alliance to develop modem technologies for HSPA+/LTE (Evolved High-Speed Packet Access/Long-Term Evolution) and its evolution.

As part of this alliance, the companies have entered into an agreement whereby Renesas Electronics is to acquire Nokia's wireless modem business for approximately $200 million. The alliance is planned to be enhanced by long-term joint research cooperation on future radio technologies. Renesas Electronics has licensed the Nokia modem since 2009 and the two companies have been working together to develop an industry-leading HSPA+/LTE platform.

"Wireless modems are an integral part of today's chipset solutions, and we believe that Renesas Electronics, as one of the key chipset vendors in the market, is in an ideal position to further develop this offering. The alliance enables us to continue to focus on our own core businesses, connecting people to what matters to them with our mobile products and solutions," says Kai Oistamo, executive vice president at Nokia.

The planned transfer of Nokia's wireless modem business enables Renesas Electronics to maximize the value of Nokia's technology assets and engineering expertise in delivering advanced mobile platform solutions to the market by combining them with Renesas Electronics' market-proven multimedia processing and RF technologies. Together with Renesas Electronics' robust line-up of application processors, RF transceiver ICs, high power amplifiers, and power management devices, the wireless modem technologies enable Renesas Electronics to deliver a complete mobile platform solution to the market.

The wireless modem business to be transferred to Renesas Electronics includes Nokia's wireless modem technologies for LTE, HSPA and GSM standards, which have been used for billions of handsets in the global market over the years. Further, Nokia transfers Renesas Electronics certain patents related to the transferred technology asset. The planned transfer would also include approximately 1100 Nokia research and development professionals, the vast majority of whom are located in Finland, India, the UK and Denmark.

"I believe that the integration of the world class Nokia wireless modem into Renesas Electronics' strong multimedia processing and RF capabilities, places Renesas Electronics in a strong position in HSPA+/LTE chipsets," says Oistamo.

The planned transfer is expected to further strengthen Renesas Electronics' position as one of the leading chipset vendors in the 3G and LTE market that is capable of providing one-stop mobile platform solutions, supporting an extensive range of modem protocols from GSM to LTE, and integrating advanced multimedia and computer processing capabilities.

In order to implement the planned business transfer, Nokia will start the appropriate personnel consultation process with its personnel representatives according to each applicable jurisdiction's labor law requirements. The transfer is subject to regulatory approvals and other customary closing conditions, and is estimated to take place during the fourth quarter 2010.

Tags: Nokia, Renesas, GSM, LTE, HSPA