Intel is negotiating to buy Infineon Technologies' wireless chip business for about $1.3 billion, according to published reports. At the same time, Samsung reportedly is making its own mobility play for Infineon's business.
Negotiations between Intel and Infineon Technologies over the sale of
Infineon's wireless chip business reportedly are advancing, even as another possible
suitor-Samsung Electronics-appears to be trying to muscle in.
Citing several sources close to the talks, Reuters reported
July 29 that executives with Intel and Infineon are continuing to talk about a
deal rumored to be in the range of $1.3 billion, and that an agreement between
the two is "more and more likely."
That news comes a day after other reports surfaced that Samsung
may now be entering the picture, also hoping to scoop up Infineon's mobile
phone business. That idea surfaced in a July 28 research report from Citigroup
analyst Glen Yeung.
Yeung said Samsung was a better fit for Infineon's business,
making the deal with Samsung more likely.
Rumors of talks
between Intel and Infineon
have been going around for several months, with
officials with both companies declining to comment.
However, Infineon CEO Peter
Bauer has been quoted in recent days as saying he is pleased with how the
company's wireless business is going and didn't see any reason to sell the
Still, Infineon reportedly has hired JPMorgan Chase & Co.
to facilitate a sale of the wireless business.
Intel executives have been open about their desire to expand
the company's chip-making business beyond its traditional PC and server market,
perhaps into the rapidly growing mobile phone space. In May, Intel
unveiled new versions of its Atom chips
that are designed for such devices
as tablets and smartphones.
Atoms initially were introduced for netbooks, but Intel
officials see an open field for expansion with the platform into such areas as
mobile devices and the embedded space.
Infineon's wireless business, which makes chips for mobile
devices built by the likes of Samsung, LG Electronics, Research In Motion,
Apple and Nokia, would fit into such expansion plans.
Talk of negotiations between Intel and Infineon comes as
wireless carriers prepare new fourth-generation mobile networks. Intel has
invested in Clearwire, which is building out a WiMax networking scheduled to be
deployed in more than 50 cities throughout the country.
At the same time, a competing 4G technology, LTE (Long-Term
Evolution), is making inroads.