Qualcomm has been evaluating Intel’s design operations from all angles, and has shown particular interest in Intel’s client PC design business. However, Reuters reported that other divisions, such as the server business, appear less relevant to Qualcomm’s strategic goals, citing sources.
Insiders said that while Qualcomm has not yet made an offer to Intel, discussions have been ongoing for months and specific plans are still fluid.
Qualcomm and Intel have not made any official statements when asked about the matter.
Acquiring Intel’s chip design business would provide Qualcomm with a strategic opportunity to diversify its product line and expand beyond mobile chips. Intel’s expertise in PC chips could complement Qualcomm’s push into AI-based computing, as AI becomes increasingly important.
“It’s not surprising that Qualcomm is interested in the PC chip business,” said Sanchit Virgogia, chief analyst and CEO of Greyhound Research. “The acquisition will likely be done to strengthen the Qualcomm-Microsoft relationship and build on the Surface notebook and Pro tablet series.”
“The convergence of mobile and personal computing devices presents a significant opportunity for Qualcomm to deliver optimized experiences across a variety of device types,” Gogia added.
Everest Group’s executive vice president of operations, Titus M, said it would be good news if Qualcomm were to enter the PC space, especially AI, but noted that “the exact form of the acquisition is not yet known and is speculative at this point.”
Goggia analyzed that Qualcomm’s goal is to strengthen its position in the AI PC field by strengthening the Snapdragon X series, which is “very well suited” to Intel’s design capabilities. He also predicted that if Qualcomm expands its business, it will pose a significant challenge to competitors such as AMD and Apple, saying that it has the potential to disrupt the market by setting aggressive prices.
Intel’s financial difficulties and ongoing restructuring
Intel, which is facing financial difficulties, posted disappointing results in the second quarter. It also laid off 15% of its staff and suspended its dividend. Its core PC client business saw revenue decline 8% last year due to the overall PC market weakness. Management is now focusing on introducing AI capabilities into PCs to encourage users to upgrade their PCs.
Titus emphasized Intel’s position, saying that the PC division is still very important to Intel. He also explained, “Although internal pressures are increasing, it makes no sense for Intel to lose its most dominant division, the PC.” He emphasized the importance of innovation, especially in the semiconductor industry, where the AI market is expected to grow.
“I doubt Intel will be ready to sell a product designed with AI in mind when the market booms,” Titus added.
This week, Intel launched Luna Lake, a chip designed to power AI applications, as part of its efforts to regain its competitive edge. But much of the chip manufacturing is outsourced to TSMC, a shift from the company’s previous reliance on in-house production.
Qualcomm’s Expansion Strategy
Acquiring certain Intel businesses would significantly expand Qualcomm’s presence in the PC chip market, which is increasingly tied to AI-based computing. Goggia added that the acquisition would allow Qualcomm to “open up a niche that supports devices that run AI tasks without an internet connection.” It would also strengthen Qualcomm’s relationship with Microsoft, which continues to explore opportunities in AI PCs.
Neil Shah, research vice president at Counterpoint Research, also speculated that Qualcomm would be interested in Intel’s server and HPC segments. “Server and HPC are key markets where Intel is struggling against Nvidia and AMD, although Qualcomm has not entered,” Shah said, adding that Intel’s Altera (FPGAs) and Movidius (visual processing unit) could help fill the gaps in Qualcomm’s portfolio.
However, there is also speculation that Intel will consider other strategies to cut costs while still maintaining its market position.
“Intel will have to decide which businesses will be profitable over the long term and which won’t, especially in a competitive environment where both AMD and Arm-based servers are gaining ground,” Shah said.
sphere of influence
If the acquisition goes through, it could also change the competitive landscape of the semiconductor market. Techarc founder and principal analyst Faisal Kausa said Qualcomm is well positioned to capitalize on growth opportunities in the PC segment.
“With Intel’s design capabilities, Qualcomm can aggressively enter the PC market and become a strategic partner for Microsoft,” Kausa said. He also pointed out that Intel’s core competency in high-performance processors would be better suited to the server market, and Intel could focus on AI and servers to counter Nvidia’s growing dominance.
Kausa added that the acquisition would be a boon for Qualcomm in markets that “still have huge growth potential, such as India, where notebook penetration is very low.” He also said the acquisition would help Qualcomm emerge as a stronger player in PCs and AI.
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Source: www.itworld.co.kr
