Intel Nears Deal For Infineon Mobile Chip Business

Intel is reportedly on the verge of buying Infineon’s wireless chip business, several months after rumours of such a deal began surfacing and a week after the giant chip maker surprised the industry with its proposed $7.68 billion acquisition of security software vendor McAfee.

Citing unnamed people close to the negotiations, Boomberg and the Wall Street Journal both reported on 26 August that negotiations between Intel and Infineon have advanced to the point that a deal could be announced before the end of the month.

The sources put the price around $1.9 billion, according to the reports.

Intel expansion

Intel executives are pushing to expand the company’s reach beyond the core PC and server businesses. Infineon’s wireless technology, which can be found in such devices as Apple’s iPhone and Samsung’s Galaxy S smartphone, would give Intel a way into the booming mobile phone market, where Intel is virtually absent.

Intel officials have been looking to position its Atom processors, initially developed for such devices as netbooks, as a possible wireless platform, but Infineon’s business would give Intel a quicker path into the space.

Mobile chip market

Advanced Micro Devices traditionally has been Intel’s key competitor in the PC and server markets. However, some Intel executives say that ARM, which designs processors that are built by the likes of Texas Instruments and Qualcomm and are found in a large percentage of mobile phones and embedded devices, leads a section of the market that Intel wants to get into.

Samsung, which also builds processors using ARM’s chip designs, has also been rumoured to be interested in Infineon’s mobile chip business, but according to the Wall Street Journal, Infineon prefers Intel’s offer because it would “bring more money than a joint venture with Samsung,” one of newspaper’s sources said.

A deal would come on the heels of Intel’s announcement last week that it wants to buy McAfee to help bring greater security features to its processor portfolio.