Report: Intel closing in on Infineon's wireless chip business

Intel is in advanced talks to acquire German chip maker Infineon's mobile business, according to a report in the Wall Street Journal, a move that would speed along Intel's desire to get further involved in the wireless market.

The report, which cited unnamed sources familiar with the deal, said Infineon has also discussed selling the unit to Broadcom and Samsung, but that Intel is the front-runner. A deal between Intel and Infineon has been rumored for weeks now, and the Journal report said an announcement could come within "days or weeks."

According to the report, Infineon is looking for around $2 billion for the unit. One price that had been bandied about last month pegged a possible sale at as much as $1.4 billion, and a recent Citigroup research note said the price could be between $900 million and $1.5 billion. All of the companies involved declined to comment, according to the Journal.

Infineon's wireless solutions unit raked in $1.13 billion in revenue in the 12 months that ended Sept. 30, or about 30 percent of the firm's total revenue. The company makes baseband chips for Apple's (NASDAQ:AAPL) iPhone 4 and iPad, and also supplies chips for devices from Nokia (NYSE:NOK), Research In Motion (NASDAQ:RIMM) and others.

Intel, for its part, has been steadily increasing its mobile presence. In May, the company unveiled a new Atom-based processor platform specifically aimed at the smartphone market. Although it is the world's largest chip maker, in mobile processors Intel has consistently trailed behind the likes of Qualcomm (NSYE:QCOM), Texas Instruments, Marvell and Nvidia, which use low-powered architecture from ARM Holdings. Intel also combined its Moblin Linux OS with Nokia's Maemo to form MeeGo, and at least one product from Nokia running Intel's Moorestown chips and using MeeGo is expected by year-end.

For more:
- see this WSJ article (sub. req.)
- see this CNet article

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