Aug 30, 2010 09:56 GMT  ·  By

Eager to expand its product portfolio beyond the realm of CPUs, Intel has announced that it has just signed a deal with Infineon, through which the former transfers ownership of its Wireless Solutions business (WLS) over to the Santa Clara company in exchange for $1.4 billion.

For years, Intel has been known as the dominant force in the field of x86 central processors, but the company is no longer content with just this market segment.

The outfit has already made its entrance into the flash storage market and, now, it intends to say its piece on the subject of wireless communications as well.

What Intel did was strike a deal with Infineon, a deal that has been under talks since July and which implies that WSL, the latter's wireless division, will be passed over to the CPU maker.

Moving forward, WSL is expected to help expand Intel's hardware aimed at embedded and mobile products, such as notebook, netbooks, smartphones and tablets.

"The global demand for wireless solutions continues to grow at an extraordinary rate," said Paul Otellini, Intel president and CEO.

"The acquisition of Infineon's WLS business strengthens the second pillar of our computing strategy - Internet connectivity - and enables us to offer a portfolio of products that covers the full range of wireless options from Wi-Fi and 3G to WiMAX and LTE,” he added.

“As more devices compute and connect to the Internet, we are committed to positioning Intel to take advantage of the growth potential in every computing segment, from laptops to handhelds and beyond," he concluded.

The division will operate as a standalone business and will continue to produce radio-frequency transceivers, power management integrated circuits (ICs), baseband processors, system software and single-chip solutions.

“The sale of WLS is a strategic decision to enhance Infineon’s value,”said Peter Bauer, CEO of Infineon Technologies AG. “ We can now fully concentrate our resources towards strong growth in our core segments Automotive (ATV), Industrial & Multimarket (IMM) and Chip Card & Security (CCS).

The deal will close in the first quarter of 2011.