By Anirban Sen, Max A. Czerny, Milana Finn, and Mike Spector
SAN FRANCISCO/NEW YORK (Reuters) – Qualcomm Inc (NASDAQ: QCOM) has explored the possibility of acquiring parts of Intel Corp (NASDAQ: INC)’s design business to bolster the company’s product portfolio, two people familiar with the matter said.
The mobile chipmaker is considering acquiring different parts of Intel, which is struggling to generate cash and looking to shed business units and sell other assets, the people said.
Intel’s PC design business for customers is a big interest for Qualcomm executives, but they are looking at all of the company’s design units, one of the sources said.
Another source familiar with Qualcomm’s operations said that Qualcomm acquiring other parts of Intel, such as the server business, would make less sense.
An Intel spokesman said Qualcomm has not approached Intel about a potential acquisition and declined to comment on its plans. Intel is “deeply committed to our PC business,” the spokesman added.
Qualcomm declined to comment.
Qualcomm, a $184 billion company known for its chips used in smartphones and counting Apple Inc. (NASDAQ:AAPL) as a customer, has been working on plans to buy parts from Intel for months. Qualcomm’s interest and plans have not been finalized and could change, according to the people.
The two sources declined to be named because they were not authorized to discuss the matter publicly.
Intel last month reported disastrous second-quarter results, including a 15% payout and a halt to its dividend. Executives are now scrambling to find ways to continue funding the company’s manufacturing plans and generating cash.
PC client business revenue fell 8% to $29.3 billion last year, amid overall weakness in the PC market.
Intel’s customer group, best known for its “Intel Inside” marketing campaign, makes laptop and desktop chips used in devices around the world. Executives said the introduction of AI-powered PCs would prompt consumers to upgrade their computers and generate more sales.
Qualcomm generated total revenue of $35.82 billion in its last fiscal year.
Earlier this week, Intel launched a new computer chip called Lunar Lake, which executives said offers superior performance for artificial intelligence applications. Taiwan Semiconductor Manufacturing Co. is making large parts of the chips, something Intel has historically done internally.
Intel Corp.’s board is set to meet next week to consider proposals from Chief Executive Pat Gelsinger and other executives on how to shrink the company’s operations in an effort to save money. Potential options include selling the company’s programmable chip unit, Altera, Reuters reported.
(Max A. Cherny in San Francisco and Anirban Sen, Milana Finn and Mike Spector in New York; Editing by Kenneth Lee)