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Intel Sells Optical Laser Unit

The chipmaker sells its optical laser products group to Emcore for $85 million.

SAN FRANCISCO --

Intel

(INTC) - Get Report

said Tuesday that it is selling its tunable laser products group for $85 million, as the chipmaker continues to prune its business of extraneous product lines.

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The deal transfers Intel's optical platform division to Albuquerque, N.M.-based

Emcore

(EMKR) - Get Report

.

The group makes a variety of products involving fiber-optic communications for the telecommunications infrastructure market. Intel does not disclose the business' financial results.

In Tuesday's announcement, Emcore said it expects Intel's assets to generate $65 million of revenue in 2008 and believes the acquisition will accelerate its drive to reach its expected earnings-per-share profitability in mid-2008.

Shares of Emcore were up 10.2%, or $1.19, at $12.83 in midday trading Tuesday.

Intel shares were up 19 cents at $25.91.

Intel acquired portions of the optical-networking business through its $2.2 billion acquisition of

Level One Communications

in 1999, one of several expensive but generally unsuccessful deals Intel made to expand its business at the time.

Since then, Intel has refocused on its core business, divesting a variety of tangential, and often times underperforming, product groups.

In 2006, Intel sold its X-scale communications and application processor business to

Marvell Technology Group

(MRVL) - Get Report

for $600 million.

And Intel has spun off other portions of its optical business, including the optical networking chip group to

Cortina Systems in September 2006 for a reported $115 million .

Intel said Tuesday that it is still exploring strategic alternatives for its remaining portion of the optical platform division that focuses on corporate customers.

According to Intel, the sale of telecom-focused optical platform business to Emcore will affect about 130 employees, although how many workers might be transferred to Emcore has not yet been determined.

The deal is subject to regulatory approval and is expected to close in the first quarter of 2008.