Qualcomm has been considering acquiring portions of Intel’s design business to enhance its product portfolio, according to sources familiar with the matter. Intel, which is facing financial challenges, is looking to divest certain business units and assets. Qualcomm has shown interest in Intel’s client PC design business and has explored acquiring various segments of the company, although the server segment may not be as appealing. Qualcomm has not yet approached Intel about a potential acquisition, and both companies declined to comment on the matter.
Intel reported a disappointing second quarter, resulting in a 15% reduction in staff and a halt on dividend payments. The company’s PC client business revenue declined by 8% last year, reflecting overall weakness in the PC market. Despite these challenges, Intel executives believe that the introduction of AI-enabled PCs will drive consumer demand and boost sales. Qualcomm, a major player in the smartphone chip market, generated over $35 billion in revenue in its last fiscal year.
Earlier this week, Intel launched a new PC chip called Lunar Lake, which is designed to deliver high performance for AI applications. The chips were fabricated by Taiwan Semiconductor Manufacturing Co., a departure from Intel’s traditional in-house manufacturing approach. Intel’s board is scheduled to meet soon to review a proposal from CEO Pat Gelsinger and other executives on cost-cutting measures, which may include the potential sale of its programmable chip unit, Altera.
Qualcomm’s interest in acquiring parts of Intel’s design business has been ongoing for several months, but the plans are not yet finalized and could change. Intel remains committed to its PC business and is exploring ways to improve its financial performance. The possible acquisition of Intel’s design units by Qualcomm could bolster its product offerings and strengthen its position in the market. Both companies continue to face challenges in the competitive semiconductor industry, and strategic decisions will be critical in determining their future success.
