Qualcomm Considers Acquiring Intel’s Design Business

By Anirban Sen, Max A. Cherney, Milana Vinn, and Mike Spector

SAN FRANCISCO/NEW YORK (Reuters) – Qualcomm has explored the possibility of acquiring portions of Intel’s design business to enhance its product portfolio according to sources familiar with the situation.

The mobile chipmaker has examined acquiring different segments of Intel, which is struggling financially and aims to divest business units and sell off assets. Intel’s client PC design business is of significant interest to Qualcomm executives while they are also evaluating all of Intel’s design units. However, acquiring segments like Intel’s server division could be less logical for Qualcomm.

An Intel spokesperson stated that Qualcomm has not approached Intel regarding an acquisition and reaffirmed Intel’s commitment to its PC business. Qualcomm declined to provide comments.

In U.S. pre-market trading, Qualcomm shares fell by 1.3%, while Intel shares rose by 1%. Qualcomm, valued at $184 billion and prominent in the smartphone chip market, has been pursuing acquisition strategies over months. The plans remain unfinalized and subject to change.

Two sources chose to remain anonymous due to the sensitivity of the matter. Following a disappointing second quarter, Intel announced a 15% workforce reduction and a halt on dividend payments. Its PC client revenue decreased by 8% to $29.3 billion last year amidst a declining PC market. Intel’s executives believe that new AI-driven PCs could stimulate consumer upgrades and boost sales.

In its last fiscal year, Qualcomm generated $35.82 billion in total revenue. Recently, Intel introduced a new PC chip called Lunar Lake, designed with enhanced performance for AI applications, with significant portions fabricated by Taiwan Semiconductor Manufacturing Co., moving away from its historical in-house production.

Intel’s board will meet next week to discuss cost-saving proposals from CEO Pat Gelsinger and other executives, including the potential sale of its programmable chip unit, Altera, as reported by Reuters.

(Max A. Cherney in San Francisco and Anirban Sen, Milana Vinn, and Mike Spector in New York; Editing by Kenneth Li)