NEW YORK (The Deal) -- Chipmaker Nvidia (NVDA) is examining options for its Icera business, but with no buyers at the table, a shutdown appears to be the most likely outcome for the mobile processor unit, according to company followers.
Nvidia announced on May 5 that it would wind down its Icera operation in the second quarter of fiscal 2016, though the company is open to a sale of the unit or the technology.
Nvidia reported quarterly results Thursday evening, and in a conference call, management said the planned wind-down or sale of the Icera unit would result in restructuring charges in the range of $100 million to $125 million, primarily during the company's 2016 fiscal year.
For Santa Clara, Calif.-based Nvidia, which has a market capitalization of about $12.2 billion, the decision comes nearly four years after it acquired the producer of baseband processors for approximately $367 million. Baseband processors are chips on mobile devices, such as cellular phones and tablets, that manage communication functions.
"If you look at Broadcom (BRCM), it's a good benchmark," said Betsy Van Hees, senior vice president of equity research at Wedbush Securities, referring to Broadcom's decision to shut down its cellular baseband business last year following a strategic alternative process.
While the unit was a "very viable asset" with significant customers, Broadcom wasn't able to find a buyer, Van Hees said.
Irvine, Calif.-based Broadcom, also a semiconductor maker, initially announced in early June that it had engaged JPMorgan Chase's (JPM) J.P. Morgan Securities to explore strategic options for the baseband business, including a potential wind-down or sale. Broadcom then said in July that it chose to shut down the unit.