Intel Plans to Buy Infineon Technologies’ Wireless Division

Intel Plans to Buy Infineon Technologies Wireless Division : Intel, the world’s largest chip-maker, is close to an agreement to buy Infineon Technologies’s wireless business, three people with direct knowledge of the discussions said.

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.

Although Intel’s acquisition of McAfee has baffled some analysts, its purchase of Infineon’s wireless business would be much less of a surprise. Intel is looking to raise its profile in the mobility market and is positioning McAfee as part of a strategy to offer protection that goes beyond the PC.

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.

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.