InteI and Infineon Deal Reported at the End of the Week : U.S. chipmaker Intel and Infineon are likely to announce an agreement on the future of the German chipmaker’s wireless business this weekend, three people familiar with the matter said. The deal is likely to happen within the next two days, the people told Reuters on Friday, adding talks were close to conclusion but could hinge on a detail.
It was not clear whether the deal would involve a sale of the whole unit, generating more than 1 billion euros ($1.27 billion), or just a stake in the business. Both Infineon and Intel declined to comment.
Citing unnamed people close to the negotiations, Bloomberg and the Wall Street Journal both reported Aug. 26 that negotiations between Intel and Infineon have advanced to the point where a deal could be announced before the end of the month. The companies could announce a deal as soon as this week, according to a report from Bloomberg . The report on the Bloomberg Web site said that Infineon is seeking $1.91 billion for the wireless business.
Intel has made it known that it wants to have its chips in more devices. While the firm does well in the desktop, laptop and server markets, in the embedded mobile market, Intel is absent. Should its acquisition of Infineon’s wireless division go through, Intel would have access to wireless technologies allowing it to slot in a wireless core for any chip destined for mobile phones.
While Intel semiconductors run more than 80 percent of the world’s personal computers, they’re absent from phones now on the market. Intel has the cash and is “sophisticated enough” to manage both purchases at the same time, said Alex Gauna, an analyst at JMP Securities in San Francisco. The Infineon unit, which also makes chips for Samsung’s Galaxy S phone, had sales of $440 million in the fiscal third quarter, a 38 percent increase from a year earlier.
Based in Neubiberg near Munich, Infineon said earlier this month it was in advanced talks with interested parties about the future of its mobile chip unit, which had annual revenue of 917 million euros in Infineon’s 2008/2009 fiscal year and now generates around 30 percent of the company’s total revenue.
The market for processors that run smartphones is dominated by technology from ARM Holdings, which licenses its designs to companies including Qualcomm, Texas Instruments and Samsung. Qualcomm produces chips that combine applications and baseband processors. Infineon said Aug. 2 that it had made “significant progress” in talks with potential buyers.