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Infineon seen close to selling cell chip business to Intel

updated 10:45 am EDT, Fri July 9, 2010

Infineon Intel deal rumored to be worth 1.4b

Rumors that Intel would buy Infineon's cellular chip business gained fuel on Friday as Germany's Die Welt claimed that a deal is close. The two firms have purportedly met several times in the past two weeks and are tentatively at a price of between $1.1 billion and $1.4 billion. No contract has been signed, but the two are now believed nearer to a deal than not.

Infineon CEO Peter Bauer is thought to have been opposed to a deal in principle, but the company's operating losses last year may have pushed the leader to consider a deal. The mobile wireless group is believed to be swinging back to a profit, but it might not do so quickly enough to avoid a deal. In the competitive marketplace, Infineon is relatively small compared to giants such as Broadcom and Qualcomm.

A move could also be necessary as Infineon may have lost some business from Apple, one of its core customers. The iPad still uses Infineon 3G chipsets, but early examinations of the iPhone 4 show that Apple has likely switched chipsets for iPhones to Broadcom. Any chipsets for a CDMA iPhone would also have to come from a company like Qualcomm.

Neither of the involved companies has been willing to comment.

by MacNN Staff



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