Amazon, the world's largest online store, is reportedly negotiating to acquire Texas Instruments, a leading designer of custom chips for mobile and embedded markets. The move will help Amazon to better compete on the market of media tablets and possibly expand its hardware offerings in general.
Israeli financial newspaper Calcalist reported on Monday that Amazon is in advanced talks to buy Texas Instruments, the company that supplies OMAP system-on-chips for Kindle Fire media tablets. The report said any deal for the smartphone chip business of Texas Instruments Inc (TI) would probably be worth billions of dollars and could make Amazon a direct rival to Apple and Samsung Electronics, which also design their own chips, reports Reuters news-agency.
"With the trend towards more vertical integration, led by Apple, speculation that Amazon is interested in TI's chipset arm is unsurprising," said Ben Wood, head of research CCS Insight.
While potential deal may seem logical, assuming that Amazon plans to expand its hardware lineup to smartphones and other gadgets, the reason to get a large chip company does not seem wise. At present, Amazon only needs one or two chip designer teams to develop one or two SoCs per year, it does not need Texas Instruments and its large product portfolio. At the same time, it is illogical for TI to sell only OMAP business unit as the company recently refocused the division to design solutions for embedded applications.
Amazon and Texas Instruments did not comment on the news-story.