Rodman & Renshaw analyst Ashok Kumar said in a note to clients today that Intel is buying the division as part of its move into the smartphone business. It has to play catch-up there with a number of rivals, including Qualcomm, Marvell, Samsung, Texas Instruments, Broadcom and others. Intel has made its own push into smartphone chips with its latest Atom processors, but these Intel-compatible (x86) architecture chips aren’t as common as chips based on the ARM architecture, which is known for its low-power processing.
Low power is key to wireless chips because battery life in small devices is a big issue. Meanwhile, there’s a huge boom happening now in smartphones and Intel isn’t really participating. The good news is that the PC market is strong. But at some point, the mobile phone chip market will be a must for Intel. With Infineon’s chip business, Intel will be able to get a foothold in a lot of the smaller chips that go into mobile phones. Infineon has the baseband chips, or radios, while Intel has application processors to handle computing tasks. Kumar said the companies have a contract, but there has been no announcement yet. Intel declined comment.