Internet retail major Amazon is in advanced negotiation to acquire the mobile chip unit of Texas Instruments, according to a report by Israeli financial publication Calcalist cited by Reuters.
If the deal is through, Amazon is expected to foray into smartphone industry, throwing its bets into an industry dominated by Apple and Samsung.
Amazon currently makes tablets and it uses chips from Texas Instruments in its Kindle Fire tablet.
According to reports in July this year, Amazon was developing its own smartphone that would compete with Apple's iPhone.
Chinese mobile-phone maker Foxconn International Holdings is said to develop the handset for Amazon that would also compete with handheld devices that run Google's Android operating system, the sources revealed.
On the other hand, Texas Instruments had earlier revealed that it will lessen its focus on wireless products like smartphones to a broader market which include clients such as carmakers to generate more profit.
Amazon had released its new Kindle Fire, challenging Apple's iPad with low prices and a storage of digital content.
Amazon's new 8.9-inch Kindle Fire HD, with a 1920-by-1200 resolution screen, operates on either Wi-Fi or 4G and is scheduled to be shipped beginning from 20 November 2012.