Qualcomm Sees Intel's Current Struggles As Great Chances To Acquire Latter's Key Departments

Qualcomm has been exploring the possibility of acquiring part of Intel's design business to bolster its product portfolio, as two insiders suggest.

According to these sources, Qualcomm is looking into the potential acquisition of various divisions of Intel. Executives at Qualcomm are particularly interested in Intel's client PC design business, but they are also keeping an eye on all of its design divisions. Another source familiar with Qualcomm's operations said that acquiring other businesses of Intel, such as the server business, would not be significant for Qualcomm.

However, as of now, Qualcomm's interests and plans have not been finalized and are subject to change.

An Intel spokesperson stated that Qualcomm has not yet approached Intel regarding a potential acquisition and declined to comment on its plans. The spokesperson said that Intel is steadfastly committed to the personal computer business. Qualcomm declined to comment.

Nevertheless, Intel's current situation is indeed grim, with the biggest issue being a lack of funds. Last month, the company released one of the worst financial reports in its 56-year history, causing its stock price to drop by nearly a third, wiping out over $30 billion in market value in a single night.

The aforementioned financial report showed that Intel's Q2 performance did not meet expectations across the board and provided disappointing guidance for the third quarter due to reduced spending on traditional data center chips and a market focus on AI chips, in which Intel lags behind its competitors.

As of the end of June, Intel had $11.29 billion in cash and cash equivalents, with total current liabilities of about $32 billion.

In an effort to get back on track, Intel has said that it will lay off more than 15% of its workforce as part of a $1 billion cost-cutting plan. The company also stated that it will suspend dividends from the fourth quarter of 2024, marking the first time in 32 years since it last suspended dividends, which have been ongoing since 1992. Additionally, Intel will reduce its annual capital expenditure by more than 20%. Notably, the company sold its stake in chip technology manufacturer Arm Holdings in the second quarter, cashing out $147 million.

It is reported that Intel's board of directors will hold a meeting next week to weigh suggestions from Intel CEO Pat Gelsinger and other executives to cut businesses to save cash. Potential options include selling its programmable chip division, Altera.