According to a Reuters report, Qualcomm is exploring the possibility of acquiring part of Intel’s chip design business to diversify and expand its product portfolio. Two sources familiar with the matter revealed that Qualcomm is seeking to purchase Intel’s design divisions, as Intel is under pressure to generate revenue by offloading some of its business units.
Qualcomm’s Interest in Intel’s Chip Design Business #
Sources indicate that Qualcomm is particularly interested in acquiring Intel’s PC client design business. However, Qualcomm is also evaluating Intel’s other design divisions. One insider noted that Qualcomm executives are focused on Intel’s broader portfolio of designs.
Another source familiar with Qualcomm’s operations believes that acquiring Intel’s server business would not make much sense for Qualcomm, which is more focused on mobile chip technologies.
Intel responded by saying Qualcomm has not yet initiated discussions regarding a potential acquisition. Intel also emphasized its ongoing commitment to the PC business, but declined to comment further on the matter. Qualcomm has also refrained from providing any comments.
The Market Context: Qualcomm and Intel #
Qualcomm, with a market capitalization of $182.4 billion, is best known for its mobile smartphone chips. For months, Qualcomm has been exploring the possibility of acquiring part of Intel’s business. However, sources caution that Qualcomm’s interest and plans are still in the early stages, and may change as negotiations progress.
Intel, with a market value of $83 billion, has been struggling. Last month, the company reported a devastating Q2 performance, including a 15% workforce reduction and the suspension of its dividend payouts. Intel’s leadership is currently brainstorming ways to fund its manufacturing plans and return to profitability.
Intel’s PC client business saw an 8% revenue drop last year, generating $29.3 billion in sales, reflecting the overall weakness in the PC market. Intel’s executives are optimistic that new AI-driven PCs will help drive consumer upgrades, thus boosting sales. Earlier this week, Intel launched a new PC chip called Lunar Lake, which it claims offers exceptional performance for AI applications.
Intel’s Ongoing Business Restructuring #
Intel’s board will meet next week to discuss proposals by CEO Pat Gelsinger and other executives to restructure the company’s operations. Potential moves under consideration include selling its programmable chip division (Altera). As part of its ongoing efforts to stay competitive, Intel is actively exploring various options to reshape its business model.