Intel says it is buying Infineon's wireless chip business for $1.4 billion in a deal that will strengthen the chip-maker's presence in Wi-Fi, 3G and 4G mobile technologies.
Infineon's Wireless Solutions (WLS) business provides baseband processors, RF transceivers, power management circuits and system software to cell phone manufacturers. It will operate as a standalone entity and continue to support its existing customers.
Once finalized, the purchase will expand Intel's current Wi-Fi and WiMAX offerings with Infineon's 3G technology and advance Intel's LTE plans. The technology acquired through the deal will be used in a variety of Intel's Atom-based devices, including smartphones, netbooks, tablets and embedded computers.
Intel President and CEO Paul Otellini said the Infineon deal strengthened Intel's ability to meet the growing demand for Internet connectivity with a variety of different technologies.
"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 Wi-Fi and 3G to WiMAX and LTE," Otellini said. "As more devices compute and connect to the Internet, we are committed to positioning Intel to take advantage of the growth potential in every computing segment, from laptops to handhelds and beyond."
Infineon's WLS business posted sales of $1.16 billion last year, accounting for about one-third of Infineon's sales in its last financial year.
The acquisition is expected to close in the first quarter of next year pending regulatory approval and customary closing conditions. Intel's board of directors and the management board of Infineon have approved the transaction.
Intel's stock was down about 2 percent in 10 a.m. Central trading on the NASDAQ amid a broader market slump.