Qualcomm Dips 3.37% Amid Rumors of Potential Intel Acquisition

Qualcomm (QCOM) has witnessed a 3.37% decline, sustaining a two-day losing streak with a cumulative drop of 4.32%.

The mobile chip giant Qualcomm is reportedly considering the acquisition of Intel's chip design business to expand its product portfolio. Sources familiar with the matter mention that Qualcomm is particularly interested in Intel's client PC design division but is evaluating the possibility of acquiring other design segments as well. While one insider indicated that Qualcomm is also looking into Intel’s server business, they believe it holds less strategic significance for Qualcomm.

An Intel spokesperson stated that Qualcomm has not approached Intel regarding any potential acquisition and declined to comment further on speculations. The spokesperson emphasized Intel's strong commitment to its PC business, while Qualcomm chose not to provide any comment.

In recent months, Intel has been grappling with deteriorating financial performance. The technology company’s latest quarterly report revealed a dismal outcome with a 1% year-over-year decline in revenue and projections of an 11% drop for the third quarter. In response, Intel has announced a 15% staff reduction and the suspension of dividend payments. Intel's stock has suffered a substantial decline, eroding its market value.

Intel is urgently exploring strategies to navigate its fiscal challenges, including divesting non-core business units. There are plans to sell the programmable chip business Altera and potentially spin off its wafer fabrication segment. Additionally, the company is contemplating the sale of shares in its autonomous driving subsidiary, Mobileye.

Next week, Intel's board will convene to assess proposals from CEO Pat Gelsinger and other executives on reducing operations expenses to preserve cash. Potential measures include divesting certain business units and selling off non-core assets.

Qualcomm's market interest in Intel's business units aligns with its strategy to enhance its standing in the global semiconductor industry. While Intel's immediate financial hurdles are evident, the company remains committed to innovating in the PC and AI sectors, as demonstrated by the recent introduction of the "Lunar Lake" PC chip, which boasts significant AI capabilities.

Despite the restructuring efforts and market strategies, Intel's long-term recovery remains a topic of cautious optimism among industry experts, given the pressures it faces from intensifying market competition and technological advancements. Qualcomm's deliberations on acquiring Intel’s design arms reflect broader industry trends of consolidation and strategic realignment within the semiconductor space.