Qualcomm (QCOM) is exploring potential acquisitions of key assets within Intel’s (INTC) design business, according to sources familiar with the discussions. The mobile chipmaker, well-known for its smartphone chips and a significant supplier to Apple (AAPL), is evaluating parts of Intel’s struggling business to expand its product portfolio.
Intel’s Financial Struggles Spark Potential Deal
Intel has been grappling with financial difficulties, including a poor second-quarter performance, an 8% revenue decline in its client PC business, and a significant 15% reduction in staff. The company has paused dividend payouts as executives work to sustain manufacturing operations and improve cash flow. Amid this pressure, Intel is looking to offload non-core business units, making it a prime target for acquisitions.
Qualcomm’s Focus on Intel’s PC Design Segment
Qualcomm is reportedly particularly interested in Intel’s client PC design business, which once powered its famous “Intel Inside” marketing campaign. Although Qualcomm is considering a range of Intel’s design units, acquiring the server segment appears less likely, according to sources with knowledge of Qualcomm’s internal strategy.
However, despite the interest, Qualcomm has not approached Intel about a formal acquisition, and no official proposal has been made. Intel remains committed to its PC business, with a spokesperson reiterating the company’s dedication to the sector.
Market Response and Future Outlook
News of the potential acquisition has stirred reactions in the market. Qualcomm’s shares dipped by 1.3% while Intel’s stock rose by 1% during U.S. pre-market trading. Although Qualcomm’s plans are still under consideration and could change, the company has been strategizing for months, hoping to strengthen its position in the industry.
Intel recently launched its new Lunar Lake PC chip, highlighting its performance capabilities for artificial intelligence (AI) applications. While Intel continues to innovate in the AI space, the company’s board is expected to meet soon to evaluate cost-saving proposals, including the possible sale of its programmable chip unit, Altera.
As Intel navigates a challenging financial landscape, its business assets may present opportunities for Qualcomm to bolster its own capabilities. Whether these discussions will lead to a concrete deal remains to be seen, but industry shifts are already influencing market performance and strategy decisions for both tech giants.