Spreading Rumors Link Intel and Infineon’s Wireless Chip In Sales Talk

Intel is making plans to purchase the wireless chip business owned by Infineon Technologies. Negotiations have already started and Intel is said to be offering $1.3 billion, while new reports are claiming that Samsung is also making plans to make a bid for the same Infineon’s business.

The reported Samsung Electronics interference, don’t seem to be affecting the negotiation talks between Infineon Technologies and Intel. Reports indicate that the negotiations are already on an advanced stage and Infineon’s wireless chip company may just soon become owned by Intel’s.

Reuters reports of July 29, based on various sources say that rumours claim that the deal talks between Infineon and Intel is within the range of $1.3 billion and that executives of both companies may more likely soon be reaching an agreement.

The Rueter reports came just a day after rumours emerged that Samsung was also interested in Infineon’s business. Samsung is said to be seeking to acquire the mobile phone company owned by Infineon. A report by Glen Yeung, an analyst from Citigroup was the first to release indication of Samsung’s interest on July 28th in a research report. Yeung felt that Samsung already being in the mobile phone industry was better fitted to acquire Infineon’s company, and suggested that Samsung may have an edge over Intel in clinching the deal.

Executives of both Infineon and Intel had refused to comment on the rumours of ongoing talks and negotiations between them, even though the rumours have been making the rounds for several months now. However, Peter Bauer, CEO of Infineon has recently been quoted as saying recently that the company was very pleased with the performance of their wireless business unit and there don’t seem to be any evident reason to sell it. Yet, reports still indicate that JPMorgan Chase & Co. have been hired to overseer and facilitate the sale of the wireless business unit.

Executives of Intel have made open comments of their desire to expand their chip manufacturing business beyond, their regular chips for PC and server market. Intel seeks to expand into making chips for the fast growing mobile market. In May, Intel had earlier unveiled its new Atom chips versions made for smartphones and tablets.

The Atom chips were initially designed for Netbooks. Intel has however now adapted the Atom for smartphones. Intel seeks to take advantage of the large and expanding mobile market and expand its chip making business to areas such as mobile devices.

Infineon’s wireless chip business is certainly an attractive expansion option for Intel, as they currently manufacture chips for a lot of mobile phone companies. Mobile brands such as LG Electronics, Samsung, Nokia, Apple and Research in Motion already make use of chips made by Infineonss chip making business unit.

Intel has already made investment in Clearwire, which is creating WiMax networking to be deployed in over 50 cities across the country. If Intel is able to acquire Infineon’s wireless business it will surely make them a larger and more profitable chip making concern.

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