According to a report by Calcalist, Amazon may be in the process of buying the smartphone and tablet chip business of Texas Instruments. TI recently announced that it will be shutting down its operations in the smartphone and tablet space, and focus on its core strengths – embedded device platforms.
Amazon is one of the perfect buyers for that business. By having its own chip manufacturing operation, it can have greater control over the chips running its Kindle devices. Given the rumors that it may enter the smartphone space and the fact that its Kindle device sales are growing significantly, this seems like a logical move.
Amazon’s competitors like Barnes & Noble use TI’s chips, so such an acquisition could also help Amazon gain a competitive advantage and make things tough for its rivals.
TI’s chip business could be worth billions of dollars, and Amazon could also be willing to pay a huge premium, given the high strategic value to it. Google, Apple and Samsung are all moving towards an operational model wherein they are trying to increase their control over the components that make their devices.