Intel buys Infineon's wireless chip shop

CHIPMAKER Intel has agreed to buy Infineon's wireless chip unit for $1.4 billion in cash.

Last week we reported that the deal was close to being signed and sealed, however the final figure announced today seems to be a bit lower than initially thought. The acquisition is Intel's second in recent weeks following its astonishing decision to buy insecurity outfit McAfee for $7.68 billion.

A purchase of Infineon's mobile business has been on the cards for some time now, with Intel keen to get into the mobile chip market. Infineon's wireless chips are already used in a lot of mobile phones including those made by Apple and Samsung, and as such that gives Intel an immediate presence in the market.

Intel's CEO Paul Otellini said, "The acquisition of Infineon's Wireless Solutions 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."

Earlier, in announcing the purchase of McAfee, Otellini introduced a third security 'pillar' for Intel. While many industry watchers are still scratching their heads over that purchase, Infineon's wireless unit seems a far more immediate fit for Intel's aspirations to take on the British outfit ARM in the embedded mobile market.

Although it's spent over $9 billion in less than a month, Intel also recently announced that its financial outlook isn't quite as rosy as first thought, lowering its earnings forecasts for the rest of 2010.

Many investors will now be looking to see how Intel uses this latest acquisition to get into the mobile market. µ