Intel spends $1.4bn on Infineon chip unit

German chipset manufacturer Infineon confirmed the rumours on Monday, announcing the sale of its Wireless Solutions division (WLS) to US chip giant Intel for $1.4bn.

Intel has been in the frame for the acquisition for several weeks, with Infineon cited as an attractive prospect not least because it is the supplier of baseband chips for the Apple iPhone. Intel has its Atom media processor business which targets portable devices and smartphones but lacks cellular chipset assets including basebands and RF chips. In this respect, Infineon’s wireless business complements Intel’s Atom business and enables the US company to offer more integrated chipsets similar to Qualcomm’s Snapdragon.

The WLS unit will operate as a standalone business, Intel said, and will continue to support Infineon’s existing customers, including support for ARM-based platforms. Infineon will now concentrate its resources on core segments in the automotive, industrial and chip card and security markets.

The acquisition expands Intel’s wifi and WiMAX offerings to include 3G as well as giving the firm a path to LTE. Intel said its goal is to expand its mobile and embedded product offerings to support additional market segments, including smartphones, tablets, netbooks, notebooks and embedded computing devices.

“The global demand for wireless solutions continues to grow at an extraordinary rate,” said Paul Otellini, Intel president and CEO. “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 wifi and 3G to WiMAX and LTE. As more devices compute and connect to the internet, we are committed to making certain that Intel is well positioned to take advantage of the growth potential in every computing segment, from laptops to handhelds.”