Nokia said recently it would buy phone chips from STMicroelectronics, Broadcom Corp. and Infineon , potentially decreasing the clout of market leaders Qualcomm Inc. and Texas Instruments Inc., Nokia's long-time supplier.

Investors saw the deals as key wins for Broadcom and STMicro as business from the leading mobile phone maker could promise a big enough hike in sales volume to help them shoulder the cost of competing in the cash-intensive chip industry.

Underscoring the need for market scale, LSI Corp. said Monday (Aug. 20) it would pull out of wireless chips, citing a need for another big handset client besides its main customer, Samsung Electronics Co., and sell that unit to Infineon.

There are about 20 makers of baseband chips, the main chip in cell phones.

Some analysts see the openness of cell phone makers to new suppliers as a boon for more small players, with Marvell Technology, Taiwan's MediaTek and Spreadtrum Communications Inc potentially standing to win new contracts in future.

By: DocMemory
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