Intel, the world's largest supplier of computer chips, yesterday announced plans to acquire Level One Communications, which manufactures silicon components, for $2.2 billion (€2.03 billion).

The two companies have approved a stock-for-stock merger, after which Level One will become a wholly-owned subsidiary of Intel. With shareholder approval, the deal should be completed by the end of June.

"Today's announced merger extends our strength in networking and communications," said Intel chief executive Mr Craig Barrett, whose company employs 4,000 people in Ireland.

Level One Communications provides silicon connection components for high-speed telecommunications and data transmission.