Amazon may be entering the semiconductor business. The company is in talks with TI about buying TI’s wireless chip business.

TI supplies the chip-sets for Amazon’s Kindle Fire tablet. It is thought that TI’s wireless chip business could be worth about $600m. It anticipates sales of $650m this year.

It is not known whether Amazon wants the TI chip business in order to enter the merchant chip market which seems unlikely, or if it is to secure supplies for the Kindle because TI is planning to exit the wireless business, or if Amazon wants in-house chip design capability in the same way that Apple bought Palo Alto Semiconductor to develop future tablet products or if, as is rumoured, Amazon is heading into the smartphone business.

TI said recently that the consolidation of the mobile industry round Samsung and Apple, which have their own chip development operations, made the wireless chip market less attractive to it.

iPhone 5 was Apple’s first phone to have its applications processor designed in-house by the PA Semi team.