Mobile processor manufacturer Qualcomm has expressed interest in acquiring Intel, which is currently valued at around $90 billion, according to The Wall Street Journal, citing informed sources.
Although the deal is still in its early stages, it has become feasible due to one of the biggest crises in Intel’s 50-year history. Even if an agreement is reached, such a large-scale acquisition will undoubtedly attract the attention of antitrust regulators. To finalize the deal, Qualcomm might have to divest some of Intel's assets or divisions to other buyers.
Intel's stock, which was once the world's most valuable chip manufacturer, has fallen by about 60% this year. In 2020, its market value exceeded $290 billion. Qualcomm, valued at around $185 billion, has seen its stock rise by approximately 17% this year. The acquisition would significantly expand Qualcomm’s business horizons, complementing its mobile chip sector with Intel's processors for laptops, servers, and embedded systems.
Previously, Qualcomm, led by Cristiano Amon, had discussions with Intel about potentially manufacturing its chips at Intel's facilities, but the project was halted due to technical issues. Qualcomm's acquisition attempt comes amid Intel's more than three-year struggle under Pat Gelsinger to overcome the crisis, which has yet to yield significant results. Intel’s manufacturing division remains unprofitable and lacks external customer orders since Gelsinger opened the company’s factories to third-party developers three years ago.
In August, after a disappointing quarterly report, Intel announced plans to lay off thousands of employees and suspend dividend payments as part of cost-saving measures. Last month, the company unveiled a plan to cut costs by more than $10 billion by 2025 and reported a $1.6 billion loss for the second quarter, compared to a $1.5 billion profit in the same period last year.
At the end of August, director Lip-Bu Tan unexpectedly left Intel's board. His departure shocked many who saw him as the future leader of one of Intel’s business units in the event of a company split.
Earlier this week, Intel announced plans to separate its chip manufacturing and design divisions, suspend the construction of factories in Germany and Poland for two years, and halt the construction of a facility in Malaysia until demand recovers. These steps, along with a multi-billion-dollar deal to produce cloud chips for Amazon, followed a board meeting in early September where the company’s strategy was discussed.
