GERMAN chipmaker Infineon has hired JP Morgan (JPM) to map out a possible divestment of its mobile phone chip unit.
The US investment bank is looking into a range of options, including a sale, reports said yesterday. Industry sources said Infineon has already held talks with PC chip giant US-based Intel.
Some analysts have said it would make sense for Intel to buy Infineon’s wireless business, but Infineon chief executive Peter Bauer said in March that he expected the unit to grow with its customers and there was no reason why the chipmaker should not try to develop it further. He said at the time the company had “nothing that must be sold urgently”.
Munich-based Infineon supplies chips for Apple’s iPad as well as components for Nokia, Samsung and Research in Motion.
Bankers estimate that the unit, which made €917m in revenues last year could be worth around €1bn (£832m).
It had considered selling it last year amid huge losses but changed tack in the second half of 2009 following a swing back to profits for the whole company.
Infineon is one of the smaller players in the industry dominated by the likes of ST Ericsson, Texas Instruments and Qualcomm. By selling the unit to Intel, it has a chance to scale up, especially as Intel looks to diversify its business beyond PC-centric x86 chips.
Infineon is believed to have been in talks with Intel over recent weeks.
However, Infineon yesterday declined to comment.
City A.M. Reporter