Amazon is in "advanced negotiations" to acquire Texas Instruments' OMAP chip division, according to Israeli financial newspaper Calcalist. The company is reportedly looking to bolster its mobile device division and the move would allow it to better compete with industry giants Apple and Samsung.
The online retailer already utilizes TI's chips in its Kindle Fire tablet lineup, but the latter recently confirmed it plans to pull out of the smartphone and tablet sector in order to reach a broader market that they believe will be more profitable and stable. If anything, the timing is certainly interesting and a deal would fall in line with the growing trend towards vertical integration.
The report also reignites speculation that Amazon plans to enter the smartphone business. Earlier this year rumors emerged that work was already underway with Chinese manufacturing giant Foxconn and that Amazon was looking to complement its smartphone strategy by acquiring patents that cover wireless technology.
Owning the technology powering its devices would give Amazon more freedom to tweak them specifically for their own purposes. It could also leave rivals like Barnes & Noble in a tricky situation, since the latter uses OMAP processors for the Nook Color and Nook Tablet HD/HD+. TI also provides the touchscreen controlling system for the new iPhone 5 and iPod touch, though it's unclear if those would be part of the deal as well.
Needless to say, with no comment from Amazon or TI, it's all just rumors and speculation at this point.