In an effort to expand its product portfolio, Qualcomm has explored the possibility of acquiring portions of Intel’s design business, according to Reuters. The mobile chipmaker has shown interest in acquiring different segments of Intel, a company currently facing financial struggles and seeking to offload some of its business units and assets, according to two unnamed sources familiar with the discussions.
Intel’s client PC design business appears to be of particular interest to Qualcomm executives, per Reuters, though the company is reportedly examining all of Intel’s design divisions. However, one source mentioned that Intel’s server business would likely be less appealing to Qualcomm. The talks are said to be preliminary, with no formal offer yet made by Qualcomm. According to an Intel spokesperson, the company has not been approached about a potential acquisition, and remains “deeply committed” to its PC business.
Qualcomm, which is primarily known for producing smartphone chips and counts Apple (AAPL.O) among its major customers, has been considering this move for months, as reported by Reuters. The company’s interest, however, remains tentative and could evolve, according to the sources, who chose to remain anonymous due to the sensitive nature of the information.
Read more: China’s Review of Semiconductor Transactions
This potential acquisition comes at a critical time for Intel. The semiconductor giant recently posted a poor second-quarter performance, which included a significant 15% reduction in its workforce and a halt in dividend payments. The company is grappling with how to sustain its manufacturing ambitions while also generating enough cash to remain competitive. Notably, Intel’s revenue from its PC client business fell by 8% last year, amounting to $29.3 billion, amid broader weakness in the PC market.
According to Reuters, Intel’s once-prominent “Intel Inside” marketing campaign made the company a household name, with its chips powering laptops and desktops worldwide. Executives are now placing their bets on the rising trend of artificial intelligence (AI)-powered PCs, hoping it will spur consumers to upgrade their devices and boost sales.
In response to the speculation, Qualcomm and Intel’s stock prices saw slight movement during U.S. pre-market trading on Friday, with Qualcomm’s shares slipping by up to 1.3% and Intel’s rising by 1%. However, Qualcomm has not made any official comments regarding the potential acquisition, leaving market observers to speculate on the future of the deal.
As Qualcomm weighs its options, Intel continues to navigate its ongoing challenges, with its PC design business potentially emerging as a key asset in the evolving semiconductor landscape.
Source: Reuters
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