Report: Amazon May Buy Texus Instruments’ Mobile Chip Division

Amazon is in advanced negotiations to purchase Texas Instruments’ mobile processor division, according to a Monday report from Israeli business newspaper Calcalist.

The deal would bring Amazon into direct competition with mobile chipmakers such as Qualcomm, Samsung and Intel, as well as Apple, which makes the ARM-designed processors for its own iPhone and iPad devices.

Billion dollar deal

If concluded, the transaction would likely run in to the billions of dollars, the paper reported.

A TI spokesperson said the company does not comment on rumours.

Such a deal would mirror Google’s recently concluded £8bn acquisition of hardware maker Motorola Mobility, a deal designed to bolster Google’s Android smartphone business while also giving the company a patent arsenal it can use against rivals.

TI said in September it would shift the focus of its chip investments away from smartphones and tablets, where it has struggled to compete, toward areas such as the automobile industry. The move led some analysts to remark that TI appeared to be looking to shed its smartphone and tablet chip business, although the company said it would continue to support existing customers.

Those customers include Amazon, with its Kindle tablets, as well as Amazon rival Barnes & Noble, which makes the Nook e-reader.

“We believe that opportunity is less attractive as we go forward,” Greg Delagi, senior vice president for embedded processing, said of the chip market for smartphones and tablets during a September investor meeting.

Tablet challenge

In September, Amazon launched three new Kindle devices, including a more powerful and cheaper Kindle Fire device, as a challenge to tablets such as Asus’ Nexus 7 and Apple’s iPad. All three devices are due to be released in the UK on 25 October.

Amazon chief executive Jeff Bezos said last week that the company sells the devices as loss-leaders, with profits dependent on the volume of media sales spurred by the devices.

Apple is set to intensify competition in the tablet market with a smaller iPad, set for launch later this month, according to rumours. Microsoft and its manufacturing partners are also preparing the imminent launch of Windows tablets, including Microsoft’s own Surface tablet.

Are you a Google expert? Take our quiz.