The storm around Intel is still developing. A board meeting will follow next week. It is possible that a deal will be on the table by then that will give Qualcomm the keys to parts of “Chipzilla.”
According to Reuters sources, Qualcomm has already looked around Intel extensively. It is said to be interested in the company’s PC business. Parts of its design division are alternative targets. The server market would be of less interest to Qualcomm.
Intel’s problems
Intel’s market value has fallen so drastically that hard choices seem necessary. The option of splitting the company between chip designer and maker, as AMD once did with the divestiture of GlobalFoundries, is one to consider. Qualcomm’s potential shopping bag, however, would contain parts of Intel of a different nature, and it will invariably lead to some trouble in an eventual attempt to separate out the latter’s chip ventures. Although unlike AMD, it uses many different chip designs simultaneously for laptops, desktops, servers and other markets, the shared knowledge base between the divisions is highly relevant.
Tip: Intel cancels 20A process, TSMC set to build Arrow Lake
Nevertheless, Qualcomm has been thinking for months about a possible incorporation of Intel parts. In the meantime, Intel’s value has fallen even further. The PC market has been hitting a rough patch for the past two years and is now cautiously climbing out of that deep slump, but Intel has missed the boat when it comes to the AI chip market, is dealing with unstable processors at the top end of the consumer market and, unlike TSMC, is not supplying big customers like Nvidia or Apple. Instead, Intel has even become a TSMC customer itself, as is true of the new Intel Core Ultra chips based on the Lunar Lake design.
Also read: Intel launches Core Ultra 2, the answer to Qualcomm and AMD
Qualcomm
Prior to the introduction of these Lunar Lake chips, it has become clear that Qualcomm has become a formidable competitor to Intel. Intel was only too happy to point out that the Arm-based Snapdragon X Elite in Windows laptops is often incompatible with x86 apps. Still, announcements surrounding Copilot+ systems show a variety of Intel, AMD and Qualcomm chips, putting Intel up against two parties that are each worth at least twice as much and have had significantly better balance sheets in recent quarters.
A potential Intel-Qualcomm deal could shift these proportions further. After all, Qualcomm has only just entered the PC adventure while Intel has already sold tens of millions of AI PCs based on its Meteor Lake architecture from late last year, despite all the setbacks.
U.S. regulators are not all that likely to step in on such a deal. Both Intel and Qualcomm are considered strategically highly relevant players for the country. The former may become a TSMC competitor even in a stripped-down form thanks to the CHIPS Act, while Qualcomm manufactures mobile SoCs for much of the Android market and makes the modems in iPhones. These are long-term options and highly speculative for now, but with only a few days until the Intel meeting, things could develop quickly.
Read more: Will Intel split itself up after all?