Infineon, Europe’s second-largest chipmaker. Infineon was reported seeking about about €1.5bn ($1.91bn) for its wireless business and Intel is to pay $1.4bn.

The purchase of the unit, which makes processors used in Apple Inc.’s iPhone, follows Intel’s $7.68bn acquisition of McAfee Inc, announced mid August.

Intel CEO Paul Otellini (right) is using deals to get chips into a wider range of devices. While Intel semiconductors run more than 80% of the world’s personal computers, they’re absent from phones now on the market.

"The global demand for wireless solutions continues to grow at an extraordinary rate," he said. "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 WiFi and 3G to WiMAX and LTE.

"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."

"The sale of WLS is a strategic decision to enhance Infineon's value. We can now fully concentrate our resources towards strong growth in our core segments Automotive (ATV), Industrial & Multimarket (IMM) and Chip Card & Security, (CCS)" said Peter Bauer (left) CEO of Infineon Technologies AG.  "This creates a great perspective for all Infineon customers, employees and shareholders.

The WLS transaction is a strategic decision for Intel and Infineon. WLS complements Intel's existing assets and enables growth in mobile computing, smartphones and embedded computing. Infineon will benefit from this by stronger addressing three central challenges to modern society – energy efficiency, mobility and security.

Intel expects WLS to continue growing, and remaining a standalone business to ensure continuity of existing customer sales, projects and support.

The business will continue to support its customers with the best solutions possible, including ARM-based products as well as Intel-based application processor platforms with leading-edge 3G slim modem solutions.

WLS with annual revenue of €917m was approximately 30% of Infineon's total annual revenue of €3.03bn in the past financial year.