Intel, Infineon Negotiate over Wireless Business, Reports Say

 
 
By Jeffrey Burt  |  Posted 2010-07-29
 
 
 

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 unit.

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.

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