Infineon Technologies AG, Europe's second-largest chipmaker, is seeking about 1.5 billion euros ($1.98 billion) for its wireless business, two people with direct knowledge of the discussions said.

The German company today said it has made “significant progress” in talks with parties interested in the unit. An agreement may be reached within the next 10 days, one of the people said, declining to be identified because the talks are private. Infineon may also seek to form a joint venture rather than sell it, one person said.

The unit, which makes chips for Apple Inc.’s iPhone and Samsung Electronics Co.’s Galaxy S phone, had sales of 917 million euros in the year ended September 2009. Infineon didn’t name the companies with whom it is in talks.

“The wireless business has shown spectacular growth and for this reason I’m a bit skeptical that they’re simply going to sell it,” said Malik Kamal-Saadi, an analyst at Informa Telecoms & Media in London. “Instead of an exit, they could find a strong partner, like Intel. I think that would be the wiser move.”

Intel Corp. is in talks to buy the unit, two people familiar with the discussions said on July 29. Citigroup analyst Glen Young last week said Samsung Electronics Co. would be a better fit for the wireless unit. On July 30, the Wall Street Journal reported that Broadcom Corp. has seen confidential financial data on the wireless unit.

The “objective of a potential transaction is the strategic development” of the unit, Infineon said today.

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Infineon spokesman Christian Hoenicke declined to name the potential buyers. He also wouldn’t say if Infineon has narrowed down the list of buyers.

Intel spokesman Chuck Mulloy declined to comment as did Chris Goodhart, a California-based spokeswoman for South Korea’s Samsung. Broadcom spokesman Bill Blanning didn’t immediately return messages seeking comment.

Infineon rose 1.9 percent to 5.28 euros at the close of trading at 5:35 p.m. in Frankfurt.

Infineon, based in Neubiberg, Germany, makes the baseband processors that control radio functions of phones. Intel processors run the software that powers the handsets.

In the first nine months of fiscal 2010, wireless business sales were at 883 million euros, up 35 percent from the same period last year. Growth in the third quarter was mainly due to a “ramp-up of new smart phone and entry-level phone platforms at several major customers,” Infineon said. A stronger U.S. dollar against the euro also lifted revenue.