Intel Nabs Infineon Wireless Unit, Upping Mobile Device Stake

The pickup comes less than two weeks after acquisition-hungry Intel said it would buy McAfee for $7.68 billion. The Infineon buy, however, is seen as much less of a surprise: Intel has been trying to gain a foothold in mobile device processors for some time, and Infineon's unit, which makes processors for devices such as Apple's iPhone and Samsung's Android-based Galaxy S phones, gives it that boost.

Infineon is Europe's second largest maker of semiconductors. The unit, officially known as Infineon's Wireless Solutions Business, will go to Intel in an all-cash deal, expected to close in the first quarter of 2011. According to a statement from Intel, it will operate as a stand-alone business and its technology will be used in Intel's Core processor-based laptops and various Atom processor-based devices, including smartphones and netbooks.

"The global demand for wireless solutions continues to grow at an extraordinary rate," said Paul Otellini, Intel president and CEO, in a statement.

"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," Otellini added.

The acquisition was rumored late last week, following a report in Bloomberg News stating Intel and Infineon were close to a deal. Bloomberg's report suggested Infineon was asking for $1.91 billion for the business.

"We all stand to benefit enormously from this deal," said Peter Bauer, CEO of Infineon Technologies AG, in a statement. "Thanks to the outstanding effort of the employees and the management during the last years, [the business] is excellently positioned to grow further with the new owner, who is ideally suited for the business."