In­tel firm to buy In­fi­neon’s mo­bile unit for 1.4 bil­lion dol­lars

The Pak Banker - - International -

FRANK­FURT: In­tel will buy Ger­man chip­maker In­fi­neon's wire­less unit for $1.4 bil­lion, en­abling the U.S. chip­maker to boost its pres­ence in the smart­phone mar­ket.

The cash trans­ac­tion is ex­pected to close in the first quar­ter of 2011 and the mo­bile unit will re­main as a stand­alone busi­ness, the com­pa­nies said in a state­ment on Mon­day.

Three peo­ple fa­mil­iar with the mat­ter had told Reuters on Fri­day that In­tel and In­fi­neon would likely reach an agree­ment on the busi­ness's fu­ture within the next few days.

This is the sec­ond ma­jor deal for In­tel within two weeks af­ter the com­pany an­nounced its $ 7.7 bil­lion of­fer for McAfee Inc on Aug 19, its largest ac­qui­si­tion, bol­ster­ing the ap­peal of its chips as it tries to ex­pand fur­ther into the mo­bile mar­ket.

In­tel's Atom mo­bile chips took the low-cost, no-frills net- book mar­ket by storm but are rarely found in smart­phones where other chip­mak­ers dom­i­nate.

"In­fi­neon would make In­tel an in­stant heavy­weight (in the mo­bile space) and buy them three, four years in R&D," IDC an­a­lyst Flint Pul­skamp has said.

But an­a­lysts also cau­tion that while an ac­qui­si­tion such as In­fi­neon's mo­bile chip unit is a step in the right di­rec­tion it will take time to pro­duce re­sults. Mean­while, ri­vals based on UK-listed ARM's chip de­sign-which is said to be more power-ef­fi­cient than In­tel's of­fer­ings-con­tinue to grab mar­ket share.

In­fi­neon shares fell 1.4 per­cent to 4.54 eu­ros by 0812 GMT in Frank­furt, widen­ing losses they posted on Fri­day af­ter In­tel warned its thirdquar­ter rev­enue would fall short of its own ex­pec­ta­tions due to weak con­sumer de­mand on per­sonal com­put­ers. -Ap

KUALA LUMPUR: Prime Min­is­ter of Malaysia Na­jib Razak (C) presses a but­ton to start con­struc­tion work dur­ing the ground-break­ing cer­e­mony for a new low-cost ter­mi­nal at Kuala Lumpur's in­ter­na­tional air­port in Sepang on Mon­day. -Afp

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