Is Amazon Getting in the Chip Biz?

A6 ProcessorAmazon has been called the iPad’s biggest competitor since Apple’s tablet hit the market more than two years ago. Although the original Kindle was not even in the same category as the iPad, Amazon campaigned against it pretty hard in the early days. Now that the Kindle maker has made a comfortable niche for itself in the tech world, it appears that tablets are not enough.

According to Reuters, Amazon is planning on buying Texas Instruments’ chipset division, which will put the company in line to compete with Apple and Samsung in the smartphone industry.

Texas Instruments (TI) currently supplies chips for Amazon’s Kindle Fire tablets and industry analyst are speculating on the potential merger. “It would make sense, as the chip is a critical component and Amazon has an existing relationship with TI,” said Ovum analyst Nick Dillon.

Some analysts seem to think that the risk may be too great for Amazon to invest in the chipset arm since independent chipmakers are reporting steep losses at this time.

TI told investors last month that it would shift its wireless investment focus to a broader market in the future.

A buyout from Amazon might have a direct impact on Apple. Apple Insider points out that TI currently manufactures A6 processor chips for the iPhone 5 and fifth-generation iPod touch.

Is this Amazon’s way of starting some partnership with Apple, or is the online retail giant planning on competing with the iPad maker on a whole new level?

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About Lory: Writer of all things app related, traveler of the space-time continuum, baker of really great cookies. Follow me @appaholik