The former Infineon unit was bought in 2009 by private equity firm Golden Gate Capital for 250 million euros ($280 million). Deutsche Telekom was among the companies invested in Lantiq through Golden Gate.

Adding Internet connections to devices ranging from soccer balls to household and industrial machines, a trend dubbed the Internet of Things or M2M, has become a new battleground for Intel, Qualcomm and other technology companies.

The number of wireless gadgets will more than double by the end of the decade, with most of the growth coming from smart devices other than PCs and smartphones, according to market research firm ABI Research.

Lantiq also produces chips for copper, fiber and hybrid copper-fiber connections as well as mobile broadband and Wi-Fi which it sells to broadband access and telecom carrier equipment providers.Technology firms are betting heavily on Internet device-connected homes for future revenues and profit. Last year Samsung Electronics paid $200 million for U.S.-based start-up SmartThings, which makes software that helps control everything from door locks to light switches in homes.

Also in 2014, Google bought smart thermostat and smoke alarm-maker Nest Labs Inc for $3.2 billion.

(Reporting by Jens Hack; Writing by Harro ten Wolde; Editing by Louise Ireland)