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Intel linked to possible TI OMAP acquisition

Rumours abound that Texas Instruments is looking to offload its application processor division, with numerous companies tipped to be sniffing around - including x86 giant and would-be-ARM-nemesis Intel.

Texas Instrument's OMAP processors, based on reference designs from British chip shop ARM, are well-regarded in the industry and form the heart of the single-board computer BeagleBoard and PandaBoard designs.

In recent years, however, rival ARM licensees have started to chip away at the market for TI's OMAP chips: Nvidia brings high graphics performance and a recognisable brand name to the tablet, winning deals with several tablet OEMs; Qualcomm offers highly integrated solutions, building chips that include 3G, LTE, Wi-Fi, and GPS connectivity in addition to processing cores; and other companies like Samsung are opting to use ARM's own reference-design Cortex-A9 and Mali processing cores in their flagship products.

Despite one or two wins of its own - including forming the heart of Research In Motion's rather lacklustre PlayBook tablet and Motorola's Milestone series of smartphones - it's clear that OMAP is struggling. The fact that TI is planning to phase out its 3G and LTE baseband operations will likely do nothing to solve the issue, pushing customers towards one-stop-shop companies like Qualcomm for their future smartphone chips instead.

As a result, a sale of the OMAP division looks all but certain, even though a Texas Instrument representative was only able to confirm to thinq_ that the company had no comment to make on the matter. Numerous companies have been tipped to be looking at an acquisition, but one name stands out: Intel.

According to a report over on EE Times, analyst Will Strauss of Forward Concepts claims that Intel is looking to spend some of its cash reserves on OMAP in order to get back into the ARM game, just in case the low-power x86 Atom chips it's currently throwing at the tablet and smartphone markets fail to stick.

If true - and Strauss points out that he's merely speculating, basing his hunch on little more than 'it would make sense' - it would mark a major turn-around for Intel, which ceased making ARM architecture processors when it sold its XScale business to Marvell. Indeed, since that time Intel has considered ARM the enemy, publicly deriding its chances outside of the embedded and ultra-low-power markets and positioning its own x86 Atom chips to eat away at the company's smartphone market.

With Intel pushing x86 as the one true architecture - even to the detriment of its own Itanium architecture - it seems unlikely that Intel would consider buying OMAP and paying its bitter rival ARM royalties to produce chips that it would itself be competing with. There is another possibility, however: that Intel would look to kill OMAP off altogether.

The company could certainly afford to buy OMAP, and would potentially learn much about the efficient design of system-on-chip packages in doing so - information which it could then use to improve its own Atom SoCs to better compete with ARM's offerings. By doing the bare minimum to fulfil its obligations to existing OMAP licensees and ceasing development of future generations of chips, it could effectively pillage the company for what it needs and allow it to die over the course of a few years.

It would be an expensive way of going about the process, however: industry analysts have suggested that Texas Instruments is looking for around $1 billion in cash for its OMAP division, and that's money Intel could instead be ploughing into research and development of its own.

Another name linked to a potential OMAP purchase is AMD, which would then look to compete with its graphics rival Nvidia in the tablet and smartphone application processor arena. Sadly, AMD lacks the deep pockets of Intel, and any such purchase would have to be in the form of a stock-led partnership with Texas Instruments. With TI allegedly looking to cash in fast to recoup its $6.5 billion purchase of analogue chip specialist National Semiconductor, that might not be an option which will appeal to its shareholders.

Thus far, Texas Instruments is remaining silent on the future of its OMAP division, leaving industry analysts - and us - furiously trying to second-guess what the company might be planning, and shareholders on tenterhooks as they sit with fingers poised above their trade buttons.