Qualcomm wants to take over Intel? Report teases game-changing chip deal

Intel, once the world’s most valuable chipmaker, is facing potential takeover interest from Qualcomm, according to a report by The Wall Street Journal. While the deal is described as “far from certain,” it marks a significant moment for Intel, whose dominance in the chip industry has been built largely on its x86 processor technology. 

For years, Intel's chips outperformed Qualcomm’s Arm-based designs, particularly outside of mobile devices. Yet, this report signals the shifting dynamics in the semiconductor industry.

The New York Times later corroborated the report, noting that “Qualcomm has not yet made an official offer for Intel.” However, should such a deal go through and pass regulatory hurdles, it would be a major move for Qualcomm. The company, which recently re-entered the desktop processor market as part of Microsoft’s AI PC strategy, has long dominated the mobile chip market, but this acquisition could accelerate its expansion into other sectors.

Intel, on the other hand, is navigating one of its most challenging periods in recent history. Despite its businesses still generating profits, Intel recently reported a $1.6 billion loss, prompting substantial layoffs and a strategic pivot. 

The company cut its workforce by more than 15 percent and announced it would stop non-essential projects, a clear sign of its internal struggles. CEO Pat Gelsinger also revealed plans to spin off Intel’s chip manufacturing business, a division that was once considered one of its greatest strengths.

Interestingly, Intel itself has had to rely on Taiwan’s TSMC for the production of its most advanced chips, highlighting the difficulties it faces in rebuilding its manufacturing capabilities. The costs associated with these efforts have contributed to its financial challenges. Additionally, the company’s 18A manufacturing process has encountered delays, further complicating its turnaround efforts.

While Intel’s competitors, like AMD and Nvidia, have made significant strides in recent years, Intel has struggled to keep up, particularly in areas like AI server chips. 

Nvidia has taken the lead in that space, while AMD has gained favor among gamers, especially with its presence in consoles like the PlayStation and Xbox. Intel, in contrast, has faced setbacks, such as missing out on securing a chip deal for the upcoming PlayStation 6.

The company also faced criticism from the gaming community after vulnerabilities were discovered in two generations of its flagship processors, leading to strange crashes. Intel responded by extending warranties and releasing updates, but the damage to its reputation was already done.

Meanwhile, Intel is also working to defend its position in the laptop market. Twice in recent years, the company has revamped its flagship laptop chips in response to growing competition from Qualcomm, AMD, and Apple, all of which have touted advantages in battery life and integrated graphics. Whether Intel’s upcoming Lunar Lake chips, set for release in October, will be enough to stave off the competition remains to be seen.