Qualcomm Considers Acquiring Intel’s Design Business

Qualcomm (NASDAQ:QCOM) has considered acquiring parts of Intel’s (NASDAQ:INTC) design business to strengthen its product offerings, as reported by Reuters on Thursday.

The mobile chipmaker has been evaluating various segments of Intel, which has been struggling with cash flow and exploring options to divest certain business units and assets.

Areas of Interest

Citing sources familiar with the matter, the report noted that Intel’s PC client design business is of particular interest to Qualcomm’s leadership, though they are reviewing all of Intel’s design divisions. However, other areas, like Intel’s server segment, may not align well with Qualcomm’s strategic goals.

An Intel spokesperson reportedly stated that Qualcomm has not made any formal approach about an acquisition and declined to comment on any potential plans. “Intel is deeply committed to our PC business,” the spokesperson added.

Qualcomm’s Plans

Qualcomm, a $184 billion company known for its smartphone chips with Apple (NASDAQ:AAPL) as a key customer, has been quietly formulating plans to acquire parts of Intel for several months. Still, Qualcomm’s intentions are not finalized and may change, according to reports.

Last month, Intel reported a tough second quarter, which included a 15% reduction in staff and a pause in dividend payments. The company is grappling with how to fund its manufacturing plans while maintaining cash flow.

Intel’s PC client business saw an 8% revenue decline last year, dropping to $29.3 billion, amid a broader downturn in the PC market.

Future Outlook

Once famous for its “Intel Inside” campaign, the company’s client division produces chips for laptops and desktops worldwide. Executives have expressed optimism that AI-powered PCs will drive consumer demand for new computers, thereby boosting sales.

Intel’s board is scheduled to meet next week to consider a proposal from CEO Pat Gelsinger and other executives on how to streamline operations and conserve cash. One option being considered is selling its programmable chip unit, Altera, according to a previous report by Reuters.