Qualcomm approaches Intel acquisition, aims for dominance

Yesterday, September 21, Reuters quoted a well-informed source saying that Qualcomm recently approached Intel to consider the possibility of acquiring this struggling corporation.

Prospects for a "huge" acquisition

Qualcomm CEO Cristiano Amon is personally involved in the negotiations to acquire Intel and is considering various options for the deal. Earlier in September, several sources revealed that Qualcomm was evaluating the possibility of acquiring Intel's design division.

Neither Intel nor Qualcomm responded to Reuters' report. Qualcomm's stock fell 2.9% after the report was published, while Intel's stock rose 3.3%.

A building in Qualcomm's headquarters in San Diego (southern California, USA)

Intel is currently in a difficult situation due to its poor business results. The reason is said to be because the corporation cannot keep up with its competitors in the race for advanced semiconductor chips, especially semiconductor chips that meet the explosive development of artificial intelligence (AI).

Meanwhile, the inability to keep up with competitors in advanced semiconductor chips has forced Intel to increase investment in new manufacturing systems to provide advanced chips to increase competitiveness. The company has even expanded its foundry business to take over chip foundry for other companies in the industry. This has increased investment costs while revenue has declined, making the situation more difficult. These reasons have led to recent losses and Intel has had to carry out a plan to cut 15,000 employees.

Since the beginning of the year, Intel's stock price has fallen nearly 60%, from approximately $50/share to about $21/share. However, Intel's current market value is still approximately $100 billion, while Qualcomm's is currently valued at about $188 billion. Therefore, if Qualcomm successfully acquires Intel, it will become a "giant" company in the semiconductor chip industry.

Intel headquarters in Santa Clara (northern California, USA)

Qualcomm's ambitions

Of course, even if Qualcomm successfully acquires Intel, it will still be difficult for Qualcomm to catch up with the market value of more than 2,800 billion USD like NVIDIA. However, owning Intel creates great strength for Qualcomm to move towards a dominant position in the chip processing segment for mobile devices and personal computers (PCs). For many years, Qualcomm has held the leading position in the chip processing market for smartphones and tablets and many other mobile technology devices.

Late last year, after a period of launching many different processor lines based on the ARM structure (which is specialized for smartphones and tablets) to integrate into laptops, Qualcomm launched the Snapdragon X Plus and X Elite platforms with performance that is not inferior to the X86-structured processor lines that Intel and AMD have produced for decades. Not only that, Snapdragon X Elite and X Plus also have the advantage of saving power and integrating many AI support technologies. By June, the first laptop lines equipped with Snapdragon X Elite and X Plus, in collaboration with Microsoft, laid the foundation for the Copilot+ laptop line, were sold on the market, opening the era of a new generation of AI laptops.

However, after a period of launching on the market, laptops integrated with Snapdragon platform are still not convincing enough in terms of their ability to replace or "overthrow" competitors such as Intel or AMD. In addition, laptops integrated with Snapdragon processors based on ARM structure still have some limitations when using software and applications compared to laptops using processors based on X86 structure. Therefore, if merging more processor chips from Intel, Qualcomm can dominate the processor chips not only on mobile devices but also on PCs (including desktops and laptops). In addition, Intel also has discrete graphics processors to complement Qualcomm's product line.

However, having only about $13 billion in cash will be a big difficulty for Qualcomm in terms of financial resources to acquire Intel.

Positive signals for Intel

Before the news broke out that Qualcomm was trying to acquire Intel, the US media reported positive signs. Specifically, CEO Pat Gelsinger recently announced that the corporation had signed an agreement with Amazon Web Services (AWS - part of Amazon) to produce semiconductor chips for AWS.

In addition, Intel will convert its foundry business into a subsidiary with an independent board of directors. This move is intended to create a clear separation between Intel's design and manufacturing businesses, giving foundry customers peace of mind that Intel's design teams will not have access to chip designs that partners order from Intel's foundry. Earlier this year, Intel announced the opening of a foundry business with the aim of meeting the needs of technology corporations such as Amazon, Microsoft, etc. to produce chips on demand for AI development.

In addition, Intel also recently confirmed that it has received up to $3 billion in support from the US CHIPS Act in a cooperation program with the US Department of Defense .

Source: https://thanhnien.vn/tiep-can-thau-tom-intel-qualcomm-huong-den-tham-vong-thong-tri-185240921200427878.htm