Intel closing in on deal with Infineon, reports say

Thu Aug 26, 2010 7:55pm EDT

Reports are surfacing that Intel is close to finalizing an agreement to buy the wireless unit of Neubiberg, Germany-based Infineon Technologies.

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.

Reports had first surfaced about a potential Intel-Infineon deal early this month. Industry analysts were quick to note that the move would help Intel get a better footing in the smartphone market, which to date has largely eluded the world's largest chip maker.

An Intel spokesman declined to comment on the latest report.

Infineon has become a much-sought-after commodity in the chip market because its chips are widely used in the lucrative smartphone business. Infineon chips, for instance, power Apple's wildly popular iPhones, as well as other hot-selling mobile phone.

Samsung Electronics and Broadcom are also reportedly vying for the Infineon business, though Intel is widely considered to be the front-runner.

Just last week, Intel announced that it had agreed to purchase security software maker McAfee for $7.68 billion. Both boards of directors have already approved that deal.

At the time, Intel said that the McAfee purchase is part of a broader mobile strategy for the company. As threats to smartphones increase, Intel is hoping to offer mobile security tools as well as chips for the devices.

Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin , or subscribe to Sharon's RSS feed . Her e-mail address is sgaudin@computerworld.com .

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