Infineon to supply phone chips to LG

FRANKFURT, July 17: Germany's Infineon has won Korea's LG Electronics, the world's fourth-biggest mobile phone maker, as a new customer for its phone chips, reducing its dependence on BenQ Mobile.

An industry source said on Monday that Infineon had beaten Texas Instruments to win the deal.

Financial details were not disclosed.

Infineon said it would provide the platform for LG's new-generation EDGE phones, which bridge the gap between second-generation GSM and third-generation technology, offering faster data transmission than GSM.

The company cited market research firm Strategy Analytics as saying that almost every second mobile phone would be based on the EDGE standard within three years.

The industry source said two-thirds of LG's new phones would in future be EDGE handsets.

Infineon said it would supply LG with the baseband processor, which is the main chip component in mobile phones, as well as the RF transceiver which selects frequencies, power management circuitry, Bluetooth chips and EDGE software.

Currently, Infineon's main customers for phone chips are BenQ Mobile -- which took over the loss-making mobile handsets business from Siemens last year -- Nokia and Samsung.

Infineon is still struggling to regain business it lost as Siemens Mobile, previously its top customer, went into decline.

Infineon shares were 0.6 percent firmer at 8.43 euros by 0714 GMT, slightly outperforming a 0.4 percent stronger German blue-chip DAX index.

REUTERS