After Dell (Nasdaq: DELL) and Hewlett-Packard (NYSE: HPQ) started their bidding for data storage firm 3PAR (NYSE: PAR), investors quickly went in search of possible other deals, bidding up names of several rivals that may soon be bought out themselves.
[Read: This Company’s 10-Day, +169% Run is Heating up an Entire Sector]

So as Intel (Nasdaq: INTC) announces plans to acquire the wireless chip division of Germany-based Infineon Technologies, it makes sense to see what other firms might be in play. (We made a similar review when Intel announced plans to buy McAfee (NYSE: MFE).) [See: Why Today’s Intel Deal Makes Tech Even More Appealing]

The untethered revolution
Intel’s decision to wade further into wireless technology is completely understandable. Smart phones and tablet computers are paving the way for a tech revolution that untethers us from cable modems and other desk-bound Internet connections. Industry watchers expect to see desktop-PC sales shrink and tablet sales rise in coming years.

Inifineon can boast of customers such as Nokia (NYSE: NOK), Research in Motion (Nasdaq: RIMM) and LG, but has barely made any profits on these chips that transmit wireless signals. Intel is likely less concerned about profits in the near-term and would instead like to find ways to boost market share in this fast-growing segment. That’s also the probable logic behind any acquisitions of other wireless chip vendors.

In that context, U.K.-based ARM Holdings (Nasdaq: ARMH) may hold appeal to potential acquirers. ARM is not involved in wireless chips, but instead focuses on other chips that go into mobile devices. ARM’s processors are quick and consume little power — a key consideration for mobile devices. Shares of ARM have had a strong run and now appear fairly expensive, so it’s not clear that the company would garner a significant buyout premium.

Other wireless communication plays
Investors may have a hard time finding a “pure-play” investment vehicle in this space. Infineon’s key rivals, Qualcomm (Nasdaq: QCOM) and Samsung focus on a range of chip technologies and are surely too large to be swallowed up by one of the traditional large tech buyers. Instead, investors are likely to focus on smaller firms that are ancillary plays on the wireless revolution.

For example in the broader wireless space, Ceragon Networks (Nasdaq: CRNT) is helping emerging economies such as the Philippines and India build out wireless networks from scratch. In many parts of those countries, traditional wire line-based phone networks were never sufficient enough to handle large volumes of data traffic and are being leap-frogged by new wireless networks.

In the past few quarters, the company has posted results well ahead of forecasts. Sales are growing at a +30% pace this year and should grow at least half that rate next year. Yet its shares have taken a big hit in this sell-off (before a +10% rebound in Monday trading), and the price-to-earnings ratio (P/E) on projected 2011 EPS has fallen from 20 to 12 in just the past six months.

MIPS Technologies (Nasdaq: MIPS)
This company makes a wide range of chips, including those that help transmit wireless data. MIPS has tailored its most recent chip offerings to run seamlessly with Google’s (Nasdaq: GOOG) Android software, which has led to an increasing number of design wins. To be sure, the company still derives the vast majority of sales from applications such as set-top boxes and advanced TV sets, but management has re-positioned the product line to derive a greater percentage of sales from mobile devices in coming years.

MIPS saw sales fall more than -30% in fiscal (June) 2009, thanks to a build-up in inventory of its chips at key customers. Inventories have subsequently been drawn down, and although full-year results were flat for 2010, the fiscal year finished on a very strong note, as fiscal fourth quarter sales were nearly +80% higher than a year earlier. Analysts expect sales to rise +10% to +15% both this year and next, but that forecast looks far too conservative in light of the company’s recent new contract momentum.

Action to Take –> When a deal was announced for 3PAR two weeks ago, shares of rivals quickly moved up and have been rising ever since. Yet on the heels of this morning’s Intel announcement, no takeover rumors have emerged and led to such gains among these chip rivals. But both Ceragon Networks and MIPS Technologies hold real merit on a standalone basis for investors, and would be even more valuable if a larger tech firm looking to move into this area made a bid.