Freescale looks to sell cell phone chip business

NEW YORK (Reuters) - Freescale Semiconductor said on Thursday it was exploring strategic options for its cell phone chip business and intends to complete a sale, joint venture or other options in the coming months.

The company, which was spun off from Motorola Inc MOT.N in 2004 and taken private in a $17.6 billion leveraged buyout in December 2006, said it would increase investments in automotive and networking markets.

Freescale also said that phone maker Motorola, also a customer, had agreed to "provide it a certain consideration" in exchange for ending its minimum purchase commitment to Freescale. Motorola said Freescale would remain a supplier.

The chip company said it would increase investments in the industrial and consumer markets that use its microcontrollers, microprocessors, application-specific processors as well as analog chips and sensor chips.

Its cellular products include baseband processors, the main chips in a cell phone, as well as radio chips and chips for power management and audio.

(Reporting by Sinead Carew; Editing by Tim Dobbyn)