Israeli newspaper Calcalist (via The Next Web) claims that the online retailer is on the brink of buying out a significant portion of the firm in a move which will enable it to produce Kindle processor chips in-house.
Texas Instruments, which develops the chips found inside Amazon's Kindle Fire HD, has been trying to offload its mobile processor business for some time and is said to be in "advanced negotiations" with Amazon.
Amazon announced last week that it does not profit from its hardware as its business model relies almost entirely on software sales. It is expected to part with billions to complete the Texas Instruments deal.
The retailer today confirmed that it will hand out refunds on past purchases to some owners of its Kindle eReaders if a judge approves a settlement with publishers accused of fixing prices.
Amazon will launch its Kindle Paperwhite e-reader in the UK this month after making its 200,000 book Lending Library subscription service available to UK Kindle owners in the territory last week.