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Intel Sets Its Sights On Infineon
July 13, 2010 10:00 AM

As the world’s largest chipmaker, Intel Corp at times has flexed its financial muscles and attempted to insert itself into new markets and manufacture technologies that it was never originally involved with. Apart from making microprocessors, Intel has been involved with flash memory (which it is mostly out of now), optical and wireless communications, and even high performance graphics. All of these investments were attempts by the company to become a competitor in a variety of different markets. Recently, Intel has once again been positioning itself to deal with changing trends in the industry. Since mobile computing is becoming more prevalent, Intel is poised to acquire the wireless communications division of German company Infineon, which might be a good indicator of things to come.

Infineon’s wireless division is involved with designing and manufacturing many RF based products, such as mobile baseband platforms, Bluetooth, GPS, etc. Some of Infineon’s customers include Apple, Research In Motion (RIM), and even the Chinese government for RFID chips in Chinese passports. Intel currently lacks cellular and RF based chipsets including basebands, all of which Infineon has developed. By acquiring Infineon, Intel would be positioning itself firmly in the mobile communications market. With its current work on a competitor for the ARM mobile processor architecture and baseband technologies like HSPA/LTE (4G) from Infineon, we could see more low cost integrated chipsets from Intel. This would put the company in direct competition with major wireless chipset manufacturers like Qualcomm. Also, considering the fact that WiMAX hasn’t panned out as Intel had originally hoped, the acquisition of key LTE technologies could prove very profitable.

Another way Intel is trying to push its mobile device agenda is through its partnership with Nokia to develop MeeGo, a Linux-based open source mobile operating system. If Intel were to go through with the Infineon acquisition, consumers could potentially see integrated mobile chipsets working in tandem with the MeeGo platform. Although it is a possibility, many things will have to fall in place before we see such developments. For starters, Nokia Siemens networks is actually a competitor of Infineon, so it will be interesting to see how Intel’s relationship with Nokia plays out if a merger happens. The move by Intel might also put it in competition with Apple Inc, even though both companies have allied together for the Macbook’s internal chipset.

If there’s any company that is financially capable of freshly entering into the mobile device market, it’s Intel. If it goes through with it, the acquisition will cost an estimated $1.4 billion. With such a large price tag, it’s clear that Intel is willing to put forth the effort and capital needed to develop industry-changing technologies. It certainly won’t be easy, considering that Intel has failed in other areas like optical and wireless communications. This fact combined with the vast amount of new competition the company is creating for itself means it would need to have something awesome up its sleeve if it hopes to survive in this industry, let alone be successful.

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