Qualcomm has been exploring the possibility of acquiring portions of Intel’s design business in order to expand its product portfolio. Sources familiar with the matter have revealed that Qualcomm has expressed interest in acquiring different pieces of Intel, as Intel is struggling to generate cash and looking to sell off business units and other assets. While Qualcomm is particularly interested in Intel’s client PC design business, they are also considering other design units within the company. However, Qualcomm has not yet approached Intel about a potential acquisition, and both companies have declined to comment on the matter.
Intel reported a disastrous second quarter, which resulted in a 15% reduction in staff and a pause on dividends. The company is facing challenges in funding its manufacturing plans and generating cash. Intel’s PC client business revenue declined by 8% to $29.3 billion last year, reflecting overall weakness in the PC market. Despite this, Intel’s client group remains a key player in the laptop and desktop chip market, and executives believe that the introduction of AI PCs will drive consumer upgrades and boost sales. In contrast, Qualcomm generated $35.82 billion in overall revenue in its last fiscal year, making it a formidable player in the chip industry.
Qualcomm, a mobile chipmaker known for its chips in smartphones and its partnership with Apple, has been working on plans to acquire portions of Intel for several months. While Qualcomm’s interest and plans have not been finalized and could change, sources suggest that the company is particularly interested in Intel’s PC design business. This potential acquisition could strengthen Qualcomm’s product portfolio and market position. Intel, on the other hand, has recently launched a new PC chip called Lunar Lake, which offers superior performance for AI applications. The chip was fabricated by Taiwan Semiconductor Manufacturing Co., breaking from Intel’s tradition of in-house chip fabrication.
Intel’s board is set to meet next week to consider a proposal from CEO Pat Gelsinger and other executives on how to trim operations and save cash. Potential options include selling off its programmable chip unit, Altera. As Intel grapples with financial challenges and seeks to generate cash, a potential acquisition by Qualcomm could provide a solution for both companies. Despite the uncertainties surrounding the potential acquisition, the partnership could result in a stronger and more competitive presence in the chip industry for both Qualcomm and Intel. The outcome of these discussions and negotiations will likely have significant implications for the future of the chip market.
