Small Cell SoC M&A Heats Up

Today Qualcomm announced that it had acquired DesignArt Networks, one of the leading small cell baseband and backhaul chip suppliers. Terms of the deal were not announced but the price Qualcomm will pay has been reported in the Israeli press to be in the range of $120-$140 million.

Founded in 2006, Israel-based DesignArt offers SoC and Software products for indoor and outdoor small cell base stations and remote radio heads. DesignArt also offers integrated line-of-sight and non-line-of-sight wireless backhaul solutions. DesignArt can support concurrent self-backhaul and relay capabilities with their DAN 3300 and 3400 baseband SoC chipsets, but also have a separate DAN3200 backhaul mobile SoC which can support sub 6 GHz, microwave and 60 GHz E-band through a software programmable SoC platform. This is a very unique and powerful value proposition where small cell backhaul is top of the agenda for most OEMs and carriers.
Qualcomm will add the DesignArt LTE and backhaul solutions to its existing portfolio of small cell and Wi-Fi technologies and incorporate DesignArt into its Qualcomm-Atheros Division.
We first reported on this deal in early July when rumors first surfaced in the press and we described the deal as part of a continuing M&A trend for small cell silicon. In 2010, Broadcom acquired small cell specialist Percello for $86 million and then in 2011, Broadcom acquired microwave backhaul specialist Provigent for $313 million. Last year we also saw Mindspeed acquire small cell vendor Picochip for $52 million.

Backhaul is one of the areas in which Qualcomm does not have a significant market share as arch-rival Broadcom dominates the segment. Broadcom is the only chipset vendor in this market that has a backhaul and small cell portfolio. This acquisition, if it goes ahead, could be the start of an attempt by Qualcomm to recapture position against Broadcom, using DesignArt as a catalyst.

In addition to solutions for backhaul DesignArt also offers SoC solutions for base station baseband and this deal puts DesignArt head to head with Freescale, Texas Instruments and Mindspeed for small cell basestation SoCs.

The success of this acquisition is all about how quickly Qualcomm-Atheros can integrate DesignArt’s products and IP into their roadmaps and this combination could become a very powerful Wi-Fi/Small Cell/Backhaul portfolio - something no other vendor has.