Print 15 comment(s) - last by Gholam.. on Aug 28 at 11:45 PM

Intel is looking to make Atom-based systems-on-a-chip designs (SoCs) for use in smart phones.  (Source: Intel via The Register)

The popular iPhone uses a Infineon wireless chip.  (Source: ChangeWave)
Purchase would put Intel in a dominate position in the smart phone industry

Germany's Infineon Technologies AG, formed in 1999 from the spinoff of Siemens AG's semiconductor division, is among the most dominant forces in the smartphone industry.  While its CPU offerings have yet to take off and dominate, every iPhone and a large number of Android smartphones use some chip (such as wireless 3G modems) from Infineon's portfolio.

Now hot on the heels of its $7.68B USD acquisition of the world's top antivirus software vendor McAfee, 
Bloomberg reports that the world's top CPU maker Intel is preparing to purchase Infineon's wireless business.  The rumored purchase price would be 1.5B € ($1.91B USD).  Infineon's CPU unit and other businesses would presumably not be included in the sale.

Such a purchase would give Intel fuel for its upcoming planned campaign against the ARM architecture in the smartphone arena.  Intel, a firm proponent of x86 based designs, currently has no CPUs in smartphones currently on sale.  Intel is working to develop scaled-down variants of its Atom platform to compete in the smartphone sector.

With Infineon's mobile wireless expertise, Intel could design better x86-based system-on-a-chip (SoC) offerings to compete with similar packages from ARM.  Intel could also potentially look to package "hardware security" leveraging McAfee's experience into such a SoC design.

Infineon's wireless silicon designs both discrete and packaged with other system components (in SoCs) act as a broadband processor controlling the output of phones' radio device.

Infineon's smartphone plan presently looks bullish, with the company looking to "ramp-up of new smartphone and entry-level phone platforms at several major customers."  That kind of drive obviously has the potential for great financial profitability, a tempting proposition for Intel.

On the other hand, another implication of the purchase, if it goes through, would be to create uncertainty, for ARM-based smartphones like the iPhone or Android Galaxy S.  These phones use ARM CPUs, but currently rely on discrete Infineon wireless communication chips.  Presumably Intel would want to keep that business alive -- especially since it pulled in 346M € ($439M USD) last fiscal quarter.  A decision to slow development on discrete offerings in favor of x86 SoC designs, though, could be used to force x86 onto the smartphone market.

Neither company has officially acknowledge talks.  Infineon officials would only say their company has made "significant progress" with an unnamed buyer interested in the wireless unit.  Intel has not commented on the talks.

Samsung is also rumored to be interested in purchasing Infineon, but according to a report in
The Wall Street Journal, Infineon prefers Intel's current offer as it would "bring more money than a joint venture with Samsung."  A Samsung Hummingbird and Infineon broadband system-on-a-chip design would obviously be tempting for Android fans.

Reuters reports that an announcement could come as early as this weekend.

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Falls in line with previous Intel strategies.
By Flunk on 8/27/2010 1:14:42 PM , Rating: 2
I expect they'll do what they did with chipsets and package them together for the same price as stand-alone.

Atom SOC w/wireless: $20
wireless chip: $20

or similar.

By Paulywogstew on 8/27/2010 1:39:49 PM , Rating: 2
Thought they couldn't do that anymore?

By nafhan on 8/27/2010 2:45:22 PM , Rating: 2
They can, but they have to have a good reason. Integrating it into the silicon would count as a good reason.

By Motoman on 8/27/2010 4:52:26 PM , Rating: 1
That's fine. What they can't do is threaten to cancel your contract if you buy from AMD...or give you kickbacks if you don't buy from AMD.

By stimudent on 8/27/2010 4:39:15 PM , Rating: 1
Oh great, this probably means that we will see more cases of ethics violations in other areas of the technology sector.

By RU482 on 8/27/2010 1:44:13 PM , Rating: 1
I lol'd

By Motoman on 8/27/2010 4:53:42 PM , Rating: 4 would have preferred "Lock, Stock, and Two Smoking Barrels?"

Nothing worse
By green6552 on 8/27/10, Rating: 0
RE: Nothing worse
By kraeper on 8/27/2010 2:13:20 PM , Rating: 2
Except maybe saying that Android has chips.

RE: Nothing worse
By Camikazi on 8/27/2010 4:00:14 PM , Rating: 2
All your chips are belong to us!

Low price
By kmmatney on 8/27/2010 2:51:54 PM , Rating: 2
I can't believe this compqny can be purchased for $1.9B, while McAfee was worth $7.7B...

RE: Low price
By wookie1 on 8/27/2010 5:00:39 PM , Rating: 2
The article suggested that the entire company wouldn't be purchased, only the wireless business.

world's leading antivirus vendor
By lparkin on 8/27/2010 7:33:59 PM , Rating: 2
I'd like to know just what MacAfee is the leader in? Marketshare? NO Revenue? NO.

So just when did they become the world's leading AV vendor? After Intel announced the acquisition?

RE: world's leading antivirus vendor
By Gholam on 8/28/2010 11:45:48 PM , Rating: 2
McAfee is VERY big in large enterprise. For example, most of US .gov uses them.

Recent acquisitions
By DaSHinVegas on 8/28/2010 3:24:58 PM , Rating: 1
Seems to me as if Intel is finding ways around their recent troubles. I had to think about why Intel would buy McAfee but I finally realized that the value in the deal lies in their OEM contracts. McAfee comes bundled with a lot of systems. Intel can now offer OEMs McAfee AV for free with their processors to give an incentive to use Intel not AMD.

This acquisition seems more technology based I think it is inevitable that we will see Intel enter the wireless communication game at some point. There is just too much money in it, they already have the infrastructure in place to ignore that market.

"There's no chance that the iPhone is going to get any significant market share. No chance." -- Microsoft CEO Steve Ballmer

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