Intel To Buy Infineon's Mobile Unit For $1.4 Billion

Intel is to buy chipmaker Infineon’s wireless unit for $1.4 billion. 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.

Three people familiar with the matter said that Intel and Infineon would likely reach an agreement on the future of Infineon’s wireless operations within the next few days. Intel’s Atom mobile chips took the low-cost, no-frills netbook market by storm but are rarely found in smartphones where other chipmakers dominate.

“Infineon would make Intel an instant heavy weight (in the mobile space) and buy them three, four years in R&D,” said Flint Pulskamp, Analyst, IDC. But analysts also caution that while an acquisition such as Infineon’s mobile chip unit would be a step in the right direction it would take time to produce results.