Shares in German chipmaker Infineon rose sharply late last week on renewed speculation that the firm is close to selling its mobile business to Intel for as much as US$1.4 billion. According to a Bloomberg report, which cites German newspaper Die Welt, the two sides have met several times in the past few weeks, though a contract has not yet been signed. Neither company has confirmed the talks. Infineon is studying options at its mobile chip unit that could include a sale, people familiar with the matter said last month, and has hired JP Morgan Chase as an advisor. Munich-based Infineon supplies chips to high-profile device-makers such as Apple, Nokia, Samsung and Research In Motion, but its mobile business competes with much larger rivals such as Qualcomm and ST Ericsson. Infineon jumped as much as EUR0.13 (to EUR5.14) in trading in Frankfurt on Friday.

According to Bloomberg, Infineon’s mobile solutions business had EUR917 million (US$1.13 billion) in sales in the 12 months ended September 2009, representing about 30 percent of the company’s total revenue. In the first six months of the current fiscal year, the unit’s sales rose 34 percent to EUR537 million. For Intel, the proposed deal forms part of an effort by the US chip giant to strengthen its standing in the mobile space. Intel’s processors run about 80 percent of the world’s PCs, a market that accounts for around 90 percent of the company’s sales. However, it is positioning its new processor – Atom – for smartphones and other portable devices. Last week, it was reported that the firm had acquired Israeli mobile chip firm, Comsys.