Amazon has entered into negotiations to buy Texas Instrument's (TI) mobile chip division, according to Israeli financial newspaper the Calcalist.
According to reports Amazon has begun "advanced talks" with TI about acquiring the firm's fledgling mobile chip division. If Amazon were to buy the chip maker it would be another major shift towards hardware manufacturing for the e-commerce company.
TI said it was shifting away from its mobile chip investments to focus on the broader chip market last month. The chip maker said it would continue to produce computing chips for its partners but would reduce investments in its mobile division going forward.
Amazon is a major TI customer. The chip maker is behind the OMAP 4470 processors found inside the new Amazon Kindle Fire tablets.
While TI executives have said they will continue to supply Amazon with OMAP processors they warned that the company would no longer invest in supporting long-term roadmaps for mobile partners.
Barnes & Nobles is also a major TI customer. TI manufactures the chips used in the firm's latest Nook tablets. It's not known if an Amazon acquisition would force Barnes & Noble to find a new chip maker or if the competitors would be willing to work together.
While the acquisition could make sense for the two partners some analysts are questioning the validity of the Calcalist's reports.
Gartner vice president of research for consumer technologies and markets Carolina Milanesi told V3 that she questions the reports of an acquisition.
"I am sceptical as to the need for Amazon to buy TI assets when Amazon is not aiming to make money out of hardware but services," Milanesi said.
Milanesi also questioned if Amazon is interested in adding to its hardware portfolio.
Her doubts are warranted as Amazon chief executive Jeff Bezos recently reiterated his company's focus on building the Amazon mobile marketplace.
Bezos also recently said Amazon sells Kindle's at cost because it's more interested in making money from digital download sales than hardware.
When asked for comment by V3 Amazon declined and TI was unavailable at the time of this writing.