German chip-maker Infineon has confirmed it is in discussions with “interested parties” about a transaction concerning its Wireless Solutions business, stating that “significant progress” has been made within these talks. While it has been widely reported that a sale of the unit is the most likely outcome, Infineon said the aim is the “strategic development” of the unit, meaning a partnership is another possible outcome. It did not state who it is holding talks with, although recent reports have placed Broadcom, Intel and Samsung in the frame, with Intel widely believed to be the front-runner. The Wireless Solutions unit has an annual revenue of EUR917 million, contributing around one-third of Infineon’s total revenue of EUR3 billion in the last financial year, with customers including “numerous well-known global mobile phone producers.” Bloomberg reported that the deal could be announced within the next ten days.
Infinon’s Wireless Solutions business competes with several large and established players in the mobile space, including Qualcomm and ST Ericsson. While a sale of the Wireless unit had been discussed before in recent years, Infineon has recently undertaken a restructure process which has improved its performance, with the mobile business an integral part of this. In contrast, Intel’s success in the mobile market has been limited, due to the fact that its current products are best suited to high-end mobile computing devices including netbooks and tablets. An acquisition of Infineon’s Wireless Solutions unit would enable it to also compete more effectively in the market for low-end terminals as well as smartphones. Samsung is also ramping-up its mobile silicon business, and it was suggested that the South Korean company may be looking to create a joint venture with Infineon, rather than seeking an outright acquisition.