Monday, October 15, 2012

Amazon.com, Inc. (NASDAQ:AMZN) Negotiating To buy Texas Instruments (NASDAQ:TXN)’s chip business

Online retailer Amazon.com, Inc. (NASDAQ:AMZN) is in talks to buy the mobile chip business of Texas Instruments Incorporated(NASDAQ:TXN), Israel's financial newspaper, Calcalist said on Monday.

Amazon.com has already entered the tablet PC segment and is rumoured to be entering the smartphone segment as well soon. Having its own chip making business will put it in direct competition with technology giants such as Samsung and Apple, both of which design their own chips.

Calcalist did not give any other details bout the proposed transaction but said that the value of any deal would run into billions of dollars.

Last month Texas Instruments had publicly said that it wold shift its focus in the wireless segment to a broader market and away from smartphones. It is looking at industrial clients such as in the automotive sector where it hopes to get more stable business and better margins.

TI had also said that while it would continue to support its customers, its mobile app chip business would not invest in supporting customers' future roadmap for tablets and smartphones.

At present Amazon uses TI's chips for its kindle range of tablets.

Chips are an important part of any computing device as they dictate how powerful any such device would be and how fast it can run.

It has gained more importance in the case of tablet PCs and smartphones which are now vying with traditional computing devices and muscling into their territory.

Faster and powerful mobile devices that can do most of the functions that are now reserved for laptops can well put the latter out of business. 

Shares of TXN are up over 2% in pre-market trading and AMZN surged 0.51%.

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