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