Intel buys Infineon wireless unit for $1.4bn

Intel has acquired the wireless unit of rival chip maker Infineon for $1.4 billion in a move that will increase the company’s growing presence in the smartphone market.

The deal will give Intel microprocessor technology with embedded wireless connectivity, including Infineon’s baseband radio chips that are used in Apple’s iPhone devices.

"The acquisition of Infineon’s WLS business strengthens the second pillar of our computing strategy – Internet connectivity – and enables us to offer a portfolio of products that covers the full range of wireless options from Wi-Fi and 3G to WiMAX and LTE," said Paul Otellini, Intel CEO, in a statement.

Infineon, which is based in Germany, said it will now focus on its automotive, industrial and card security business lines.

The mobile processor market is currently dominated by chips based on the ARM architecture, which was originally developed in the UK by Acorn Computers. But one communications analyst believes that Intel’s latest buy will help its Atom range of mobile device chips catch up by accelerating its time to market and by forging new partnerships with device makers.

"This acquisition has accelerated Intel’s time to 4G [i.e. WiMAX and LTE] by at least two years," says Jack Gold, "and provided them with a market opportunity it could not have achieved on its own by bringing it relationships in the market it did not have."

The deal follows Intel’s $7.7 billion acquisition of security software vendor McAfee earlier this month. Some analysts see that deal as part of Intel’s mobile strategy, as it will allow the company to build security functionality directly into Atom chips.

Peter Done

Peter Done is managing director of Peninsula Business Services, the personnel and employment law consultancy he set up having already built a successful betting shop business.

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