Intel is to buy the mobile phone chipmaking division of German’s Infineon for the equivalent of 1.1 billion euros.
This is the second major deal for Intel within two weeks after the company announced a six billion euros offer for computer security software firm McAfee.
With the purchase, the US microchip maker hopes to boost its presence in the smartphone market, currently dominated by its competitors.
Infineon said the sale will allow it to focus on its core segments – chips for cars, industry and bank card security.
The deal comes amid a flurry of M&A activity worldwide as companies struggle to boost revenue in an anaemic economic environment.