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Amazon reportedly is eyeing up Texas Instruments' SoC business

Updated Cheaper chips for the Kindle
Mon Oct 15 2012, 15:50
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ONLINE RETAILER Amazon is reportedly looking at buying Texas Instruments' mobile chip business.

Israeli financial newspaper Calcalist reported that Amazon, which last month announced a slew of tablets sporting Texas Instruments chips, is in advanced talks to buy the chip designer's system on chip (SoC) business. According to the financial rag the deal, should it happen, would be worth billions of dollars.

Texas Instruments has already voiced its desire to offload its OMAP SoC business, but after securing a key design win with Amazon in the Kindle Fire tablets it was thought that more wins were in the pipeline. Amazon CEO Jeff Bezos spent a bit of time during the Kindle Fire presentation talking up the OMAP SoC used in the tablet, even claiming that it was significantly faster than the Tegra 3 chip in Google's Nexus 7 tablet.

Amazon is also widely tipped to get into the smartphone market, while chip vendors such as Texas Instruments, Renesas, NXP and STMicroelectronics are all trying to move away from low-margin, high investment markets such as consumer electronics and into automotive and healthcare. Should Amazon buy Texas Instruments' SoC division it would move deeper into the hardware business in addition to the online retail and internet infrastructure markets that are its main strengths.

That Amazon would be moving into new territory, particularly one that many chip vendors are trying to get out of, raises some doubts about the validity of Calcalist's story. However, if Amazon deems it a necessary purchase to help it sell products through its web based store and if the price is right, meaning Amazon can continue to offer cut-price tablets in the future, then the company might bite at the chance to buy a division of one of the most well established chip vendors in the market.

Texas Instruments did not get back to us with comment by press time.

Update
Texas Instruments got back to say it doesn't comment on market rumours and speculation. However the firm added that the smartphone market is becoming "less attractive".

The firm issued a statement to The INQUIRER in which it said, "While the opportunity in Smartphone is less attractive, we are fully committed to OMAP and Connectivity products - and we see a great opportunity for both OMAP & Connectivity in a broader set of embedded applications and we are accelerating our push into these new markets with product roadmaps optimized for automotive, industrial and other consumer applications."

Texas Instruments then went onto give examples of markets where it sees the OMAP SoC as a "perfect fit", which included automotive, human to machine and machine interaction and robotics. One thing is sure, however, the firm's list does not include smartphones and tablets. µ

 

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