U.S. chipmaker Intel (Nasdaq: INTC) is reportedly in advanced talks to acquire Infineon Technology's wireless chip unit, which could land the Silicon Valley giant's chips in Apple's (Nasdaq: AAPL) iPhone and iPad.
Other companies interested in picking up Infineon's unit are Samsung and Broadcom (Nasdaq: BRCM), since these companies already have business and manufacturing models closer to Infineon than Intel. But Intel appears to be the front-runner.
Rumors of Intel buying Germany's Infineon's wireless unit had surfaced some weeks ago. Infineon's wireless unit makes chips which are used in mobile phones manufactured by companies such as Samsung, LG, Nokia (NYSE: NOK), and Apple.
Intel may pay more than $1 billion for the unit, which had raked in sales of about $1.13 billion in the 12 months ended Sept. 30, and accounts for about 30% of the Neubiberg, Germany-based Infineon's revenue.
The acquisition could be giant leap for Intel in the booming smartphone market that is dominated by Apple's iPhone and Android-powered devices. A deal could result in Intel's chips being deployed by leading phone makers including Nokia and Samsung.
Intel, which is the world's largest chipmaker, has consistently trailed in mobile space behind the likes of Qualcomm (Nasdaq: QCOM), Texas Instruments (NYSE: TXN), and Broadcom, which use low-powered architecture from ARM Holdings.
Meanwhile, mobile phones are selling at four times the rate of PCs, Intel's core market.
In May, Intel unveiled a new Atom-based processor specifically aimed at the smartphone market. Furthermore, earlier this year, Intel combined its Moblin Linux OS with Nokia's Maemo to form MeeGo, and at least one product from Nokia based on MeeGo is expected by year-end.
Infineon shares were up 1% at $5.23 on the Frankfurt exchange, while shares of California-based Intel ended Friday's regular trading session at $20.60.
International Business Times, The Global Business News Leader
