Infineon Technologies AG (NYSE/Frankfurt: IFX) said Wednesday it is teaming with Nokia Corp. (NYSE: NOK) to create chips for the next generation of mobile broadband.

The chipmaker already supplies the world's largest handset maker with some chips, but it will be collaborating with Nokia to ensure its transceiver chips will work with Nokia's 4G modems that use Long-Term Evolution technology. The deal could also eventually lead to Infineon supplying LTE chips for future Nokia smartphones and mobile computing devices.

The collaboration is another sign that the transition to 4G is gaining momentum, and the chip space is already seeing some stiff competition. Chip-making giant Qualcomm Inc. (Nasdaq: QCOM) recently introduced a new family of multi-mode chips that can support HSPA and LTE technologies at the same time. This is important because many mobile operators that are moving to 4G networks need a 3G fallback until the LTE networks are fully built out.

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— Marin Perez, InformationWeek