Intel could buy Infineon unit for $1.4 bn

SAN JOSE, USA: U.S. chipmaker Intel is near a deal to buy German chipmaker Infineon's wireless business and could pay around $1.4 billion, the Financial Times reported on Sunday.

An announcement could be made on Sunday although the agreement has yet to be finalized and could still fall through, the business newspaper said, citing people familiar with the negotiations.

Based near Munich, Infineon competes with U.S. giants Qualcomm and Broadcom in the chipset industry and supplies chips to top phone manufacturers like Nokia, LG and Apple.

Buying Infineon's mobile chip unit would make Intel a much bigger player in the booming smartphone and mobile device market and could save it years of research and development.

On Friday, three people familiar with the matter told Reuters that a deal between Intel and Infineon could be reached over the weekend.

An Intel spokesman declined to comment.

Intel's Atom mobile chips took the low-cost, no-frills netbook market by storm but are rarely found in smartphones where other chipmakers dominate.

Infineon's wireless unit is widely recognized for its chipset technology, but is seen lacking the necessary funds to invest into research and development needed to keep up with rivals.

Infineon's mobile unit had annual revenue of 917 million euros ($1.2 billion) in its 2008-09 fiscal year and generates around 30 percent of the company's total sales.