Intel May Buy Infineon’s Mobile Chip Business

Intel (s intc), the PC chip giant, in its efforts to aggressively diversify into the mobile semiconductor business is looking at acquiring German chip maker Infineon’s mobile chip division, according to the German edition of the Financial Times.

Infineon, which supplies chips to Nokia (s NOK), RIM (s RIMM) and Apple (s AAPL), among others, is one of the smaller players in the industry dominated by the likes of ST Ericsson (s eric), Texas Instruments (s txn) and Qualcomm (s qcom). By selling the unit to Intel, it’s being given a chance to scale up, especially as Intel looks to diversify its business beyond PC-centric x86 chips.

I have been very critical of Intel’s foray into the mobile chip industry. Buying this Infineon division would be the right move, but as to whether it’s enough, I’m not so sure. The company in the past has tried to buy its way into new markets such as optical and wireless but failed and was forced to retreat. However, the current shift to the Mobile Internet is too disruptive for Intel to ignore, so it has to do something. It might as well start by buying Infineon’s mobile chip business.