Amid Intel’s challenges, Qualcomm has reportedly made a bid to acquire the company, as reported by The Wall Street Journal. Sources familiar with the situation indicate that the deal is “far from certain.” Similarly, The New York Times confirmed that Qualcomm has reached out to Intel in recent days regarding a potential takeover, although no official offer has been made yet.
The NYT notes that representatives from both Qualcomm and Intel declined to comment on the developments. Recently, Intel’s market value plummeted to $93 billion, reflecting a 60% decline in share value. In contrast, Qualcomm’s market cap has surged to $18 trillion, positioning it among the world’s 100 most valuable companies.
Following the AI boom, Intel has faced significant challenges with its foundry business. The company has struggled to transition to smaller process nodes, while TSMC has advanced with cutting-edge lithography techniques. Additionally, Nvidia has emerged as the most valuable company globally, capitalizing on the Generative AI surge, resulting in Intel losing many customers in the server space. Intel’s Gaudi AI accelerator has also failed to gain traction.
Despite the potential interest, a deal between Intel and Qualcomm is unlikely to materialize due to potential regulatory scrutiny worldwide. Recently, Intel received $8.5 billion in grants from the US government under the CHIPS Act to establish new chip manufacturing plants.
The US government aims to support domestic chip companies to enhance semiconductor manufacturing and ensure a reliable supply chain within the country. Amid rising geopolitical tensions, having a domestic chip manufacturer would also help the US maintain technological independence.
Despite the challenges, Intel’s client-side business appears ready to compete with Qualcomm’s ARM-based Snapdragon X series processors. The new x86-based Intel Lunar Lake chipsets show promise, and recent reports suggest that the Snapdragon X Elite has underperformed in the market. This could offer Intel a chance to reclaim some market share.
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