Qualcomm (QCOM.US) is exploring the acquisition of Intel's (INTC.US) chip design business, according to reports.
1min read Intelligence Finance learned that Qualcomm (QCOM.US) has explored the possibility of acquiring Intel's (INTC.US) part of its chip design business to expand its product portfolio. One of the sources said that Qualcomm executives are very interested in Intel's client PC design business, but they are considering the company's entire design departments. Another source who knows Qualcomm's operations said that other businesses of Intel, such as its server business, are not meaningful to Qualcomm.
The mobile chip maker has been considering acquiring different businesses of Intel, according to the sources. Intel is currently struggling to create cash and is seeking to spin off its business units and sell other assets. As of the time of writing, an Intel spokesperson said that Qualcomm has not contacted Intel about a potential acquisition and declined to comment on its plans. The spokesperson said that Intel is "fully committed to the PC business." Qualcomm declined to comment.
Qualcomm, which is worth $184bn and is known for producing smartphone chips, has been planning to acquire part of Intel's business for several months, the sources said. Qualcomm's interest and plans are not finalized and may change, the sources said.
Intel last month reported a disastrous second-quarter performance, including a 15% workforce cut and a dividend suspension. Executives are struggling to figure out how to continue to fund the company's manufacturing plans and generate cash. Last year, Intel's PC client business revenue fell 8% to $29.3bn amid a softening PC market overall.
Intel's customer base was once known for its "Intel Inside" marketing campaign, and its notebook and desktop computer chips were used in machines around the world. Executives said the launch of AI PCs would drive consumers to upgrade their computers, boosting sales.
Earlier this week, Intel launched a new PC chip called Lunar Lake, which executives said offered outstanding performance for AI applications. A significant portion of the chips were manufactured by TSMC (TSM.US), while Intel has traditionally produced them in-house.
Intel's board will meet next week to weigh up suggestions from Intel chief executive Pat Gelsinger and other executives to cut operations to save cash. Potential options include selling its Altera programmable chip division, according to reports.