Numerous reports from mainstream media indicate that Qualcomm has contacted Intel about possibly purchasing the American chip giant. Intel recently has been lurching as The Volt Post earlier reported that the company will no longer be using its indigenous ‘Intel 20A’ process node with its future consumer-oriented Arrow Lake processors.
This might be a game-changing transaction for the industry, but it will not be easy to complete.
According to the individual briefed on the situation, Qualcomm CEO Cristiano Amon is actively participating in the talks to purchase the fifty-year-old Intel. According to a second source with knowledge of the matter, Amon has been aggressively exploring other possibilities for a transaction for the business.
Reuters revealed earlier this month that Qualcomm looked into buying some of Intel’s design division, with its PC design unit being of special interest. Executives from Qualcomm were looking over Intel’s whole line of operations.
The conversations with Intel are at an early stage. The San Diego-based company has not made a formal offer for Intel, according to third person familiar with the matter.
Intel declined to comment. Qualcomm did not immediately respond to a Reuters request for comment.
The approach by Qualcomm comes at a moment of weakness for Intel, which was once the most valuable chipmaker in the world, but whose shares have lost nearly 60% of their value since the start of the year.
The talks with Intel are still in the early phases. Based on information from a third party familiar with the situation, the San Diego-based business has not made an official offer for Intel.
Intel opted not to respond. An inquiry for comment from Reuters was not immediately answered by Qualcomm.
Qualcomm’s attempt coincides with a vulnerable period for Intel, the world’s most valuable chipmaker before its shares plummeted by around 60% since the year’s beginning.
15,000 Employees Jobs in Danger
The news comes as a wave across the industry as Intel begins a massive reorganization following unsettling financial results from the previous quarter.
15,000 employees are still being let go by the corporation, which is one of the biggest employee reductions in its 56-year existence.
The ‘Cash Crunch’ Deal
Should a transaction proceed, antitrust authorities in China, Europe, and the US would probably investigate it closely. It might be necessary for Qualcomm to sell off a portion of Intel in order to receive regulatory permission.
The proposed acquisition would be the largest in the tech sector since Broadcom’s attempt to acquire Qualcomm for $142 billion in 2018. However, the deal was scrapped by President Donald Trump due to concerns over national security.
The $188 billion market value of Qualcomm made it impossible for Reuters to calculate how it would pay for an offer to purchase Intel, which is worth $122 billion when debt is taken into account.
Recent company filings indicate that Qualcomm has approximately $13 billion in cash.
How Qualcomm would manage the acquisition of Intel Corporation contract manufacturing division is likewise unknown. Intel has spent hundreds of billions of dollars over decades refining its fabrication process and hiring tens of thousands of engineers to create chips with an atomic level of perfection.
Currently, Qualcomm uses designs and other technology from Arm Holdings and contracts with companies like Taiwan Semiconductor Manufacturing Co.; it has never run its own chip production, or fab.
The current suggestion was for the corporation as a whole, according to a report from Bloomberg lately. Qualcomm hasn’t completely ruled out purchasing or disposing of Intel in pieces, though. The magazine was informed by another source in the know that Qualcomm has been in communication with US regulators and feels that an all-American merger could alleviate any apprehensions.
Following a board meeting this week, Intel Corporation made a number of announcements, which were included in a memo from CEO Pat Gelsinger. According to earlier reports from Reuters, Gelsinger and other executives outlined a plan to restructure the corporation and break off operations.
‘Intel 18A’ Node is Still Scheduled for 2025?
As per Intel Corporation, the release of its highly anticipated next-generation ‘Intel 18A’ node is still scheduled for 2025.
The company claims that the strength of the yield metrics for 18A is what motivated them to switch its engineering resources from the older 20A process Node to the more recent 18A node. Once more, Intel reported that for 18A, it had achieved a sub-0.40 D0 defect density (def/cm^2)—a crucial indicator of a process node’s yield rate.
As part of a memo from CEO Pat Gelsinger, Intel released a series of announcements that stemmed from a board meeting last week. Gelsinger and other executives presented a plan to shave off businesses and restructure the company, Reuters has previously reported.
*Inputs are taken from Yahoo Finance.
