Intel is planning to buy the wireless division of German company Infineon Technologies for $1.4bn (£905m).
Infineon's Wireless Solutions Business (WLS), which provides chips for various smartphones including the Apple iPhone, will operate as a standalone business and support Intel's wireless offering for mobile devices.
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Paul Otellini, Intel president and CEO, said the acquisition would enable the company to offer a portfolio of wireless options from Wi-Fi and 3G to Wi-Max and LTE as part of Intel's computing strategy.
"As more devices compute and connect to the internet, we are committed to making certain that Intel is well positioned to take advantage of the growth potential in every computing segment, from laptops to handhelds," said Otellini.
The acquired technology will be used in Intel Core processor-based laptops and various Intel Atom processor-based devices, including smartphones, netbooks, tablets and embedded computers as well as ARM-based products.
The deal is expected to be completed in the first quarter of 2011 and follows Intel's acquisition of security software giant McAfee on 19 August.