Qualcomm might be Intel’s savior after all

By Kunal Khullar Published September 6, 2024

Qualcomm is reportedly considering a strategic acquisition of Intel’s PC client business, marking a significant shift for the ARM chipset maker. If this move materializes, it could reshape the competitive landscape of the PC industry, giving Qualcomm a foothold in the x86-dominated market while allowing Intel to refocus on its broader growth initiatives.

According to an exclusive report from Reuters, two anonymous sources hinted at these discussions. However, no formal communication has occurred between Intel and Qualcomm so far. An Intel spokesperson emphasized the company’s “deep commitment” to its PC business, echoing statements made at the recent Core Ultra Series 2 launch in Berlin.

Intel has faced significant challenges in recent months. Following its announcement of a 15% workforce reduction ahead of its earnings call, the company reported a historic drop in revenue, leading to a 20% plunge in stock prices and investor lawsuits. Revenue from its PC client business declined by 8% to $29.3 billion last year, reflecting broader challenges in the PC market. Meanwhile, Intel’s 13th- and 14th-generation Raptor Lake desktop processors have been plagued by instability issues attributed to increased operating voltages caused by a microcode bug that results in crashes and system freezes.

The potential rationale for Intel considering divesting its PC client division could be to recover costs. Offloading this segment could help the company free up resources to pursue leadership in high-growth areas like artificial intelligence, foundry services, and custom silicon development. Intel’s long-term vision under CEO Pat Gelsinger is to establish itself as a leading chip manufacturer for other companies, and this deal could align with that strategy.

For Qualcomm, acquiring parts of Intel’s PC business would likely accelerate the transition to ARM-based computing. The company recently made strides in the Windows PC market, particularly in the mobile segment with its Snapdragon X Elite processors. Last year, the company reported $35.82 billion in overall revenue, and that figure is expected to grow as the AI-powered PC market gains momentum. By leveraging Intel’s x86 expertise, Qualcomm could develop hybrid processors that combine ARM’s energy efficiency with x86 performance, which is ideal for ultrathin laptops and mobile PCs. This could intensify competition in the PC market, challenging both Intel and AMD while providing consumers with more powerful, battery-efficient devices.