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Rumor: Amazon May Buy SoC Business from TI

Israeli financial newspaper Calcalist reported on Monday that Amazon is in advanced talks with Texas Instruments to purchase the chipmaker's System-On-Chip (SoC) business.

Amazon is one of TI's biggest customers, currently using the OMAP4470 in the just-launched Kindle Fire HD tablets. The purchase, if the report is true, would be worth "billions" of dollars and would make Amazon a direct rival to Apple, Samsung, Nvidia and other chip makers.

Last month, TI said during an investor call that the smartphone market has become a less attractive long-term opportunity for TI’s OMAP products, primarily due to vertical integration and market consolidation. The company reportedly plans to focus on a broader embedded market that will include industrial clients like car manufacturers.

"TI remains committed to the OMAP platform and its customers," TI told Tom's. "The team is not 'leaving the mobile industry for good,' and will not leave current mobile customers. Though TI is accelerating the expansion of OMAP processors into a broader set of embedded applications, the team remains dedicated to advancing current mobile customers’ OMAP processor-based product lines."

Based on that comment alone, it would seem that TI has no plans to exit the mobile business nor sell its SoC business. Even more, Gartner analyst Carolina Milanesi told Reuters that it's highly doubtful Amazon will want to "become that intimately involved with hardware."

Then again, Ben Wood, head of research at British wireless consultancy CCS Insight, doesn't find it surprising that Amazon wants TI's chipset arm. The latest trend is "vertical integration," a movement led by Apple which produces its own ARM-based chips for the iPad, iPhone and iPod Touch.

Shares in Amazon were up 0.8-percent to $244.39 in premarket trade on Nasdaq while TI shares were up 1.9-percent to $27.8, Reuters said.

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  • chewy1963
    Ah yes the Commodore/Tramiel school of business... Buy your supplier! That worked great for Commodore! er wait, no it didn't
    Reply
  • curiosul
    Apple is not a chip maker (as far as I know) ...
    Reply
  • puddleglum
    curiosulApple is not a chip maker (as far as I know) ...I think he was refering to cow chip.
    Reply
  • Estix
    Amazon buying TI would be less a move for themselves, and more a move against Barnes and Noble, by controlling the supplier of their largest Ebook Reader competitor.
    Reply
  • blazorthon
    chewy1963Ah yes the Commodore/Tramiel school of business... Buy your supplier! That worked great for Commodore! er wait, no it didn't
    Intel is their own supplier for manufacturing and it works out so well for them that they're one of the largest technology companies.

    curiosulApple is not a chip maker (as far as I know) ...
    Apple more or less designs their SoCs, but Apple doesn't manufacture them last I checked.
    Reply
  • SneakySnake
    Apple creates and designs their chips, and they use Samsung's foundries to product them
    Reply
  • Camikazi
    SneakySnakeApple creates and designs their chips, and they use Samsung's foundries to product themThey didn't do much designing until the A6 before that they just used Samsung CPUs (Hummingbird for A4 and Exynos for A5/X) with PowerVR GPUs really. The A6 is where they started actually designing things and really make it a custom package.
    Reply
  • rosen380
    I think chip-maker generally refers to the designing part, more than the physical making of the chip. So, Apple qualifies now that they are doing the design part.

    If Apple isn't a chip-maker because Samsung does the actual 'making', then do Microsoft and Sony don't make gaming consoles, Nike doesn't make shoes, Apple doesn't make phones, tablets and media players, etc...

    Reply
  • blazorthon
    rosen380I think chip-maker generally refers to the designing part, more than the physical making of the chip. So, Apple qualifies now that they are doing the design part.If Apple isn't a chip-maker because Samsung does the actual 'making', then do Microsoft and Sony don't make gaming consoles, Nike doesn't make shoes, Apple doesn't make phones, tablets and media players, etc...
    They aren't makers of any of those unless they actually make the products. Making something doesn't refer to designing it, it refers to making it. Designing the chips is what refers to designing them.
    Reply
  • rosen380
    But when someone refers to Nike or Reebok as shoe-makers, no one jumps up and says-- hey those guys don't make any shoes, they just design them. When someone calls Apple a chip-maker, about a billion people step up to make the correction.

    Likewise, when Apple sells a product with a $250 BoM for $600 built by virtual slave labor, you have people protesting outside of Apple stores. When Nike sells a pair of Jordans for $200 that have a $2 BoM and are made in similar or worse conditions, you really don't see the same...

    So long as every time someone says, "Who makes the XBOX 360?", the answer is Foxconn, I guess I'm OK with not calling Apple a chip-maker.
    Reply