Amazon May Acquire Texas Instruments’ Mobile Chip Unit

The purchase would allow it to design chips for its Kindle tablets

By Christopher Freeburn, InvestorPlace Writer

Internet retail giant Amazon (NASDAQ:AMZN) may be about to step into the computer chip business.

Reports are circulating that Amazon is in discussions with Texas Instruments (NASDAQ:TXN) to acquire the technology firm’s mobile chip-making unit. A potential deal would be worth billions of dollars, Reuters noted.

It’s True, Amazon Makes No Money From the Kindle
It’s True, Amazon Makes No Money From the Kindle

Shares of Amazon dipped fractionally in Monday afternoon trading, while Texas Instrument shares rose more than 3%.

While chip-making may seem far removed from Amazon’s normal business, its recent foray into the tablet PC market may make the move a more logical step.

The company uses Texas Instrument chips to power its Kindle tablets. With growing Kindle sales and an exploding tablet market, Amazon may wish to secure its supply of a vital component to drive growth.

Apple (NASDAQ:AAPL), whose market-dominating iPad competes directly with Amazon’s Kindle Fire and Kindle Fire HD tablets, has recently moved to reduce its reliance on mobile device rival Samsung for chips, even luring away a top-chip designer from the South Korean electronics giant’s Texas chip operations.

Texas Instruments has previously indicated a desire to move away from the mobile device market, toward more profitable chips, including those in automobiles.

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