Exclusive-Qualcomm has explored buying parts of Intel’s chip design business, sources say By Reuters

By Anirban Sen, Max A. Cherney, Milana Vinn, and Mike Spector

SAN FRANCISCO/NEW YORK (Reuters) – Qualcomm (NASDAQ: ) has explored the possibility of acquiring parts of Intel’s (NASDAQ: ) design business to boost the company’s product portfolio, according to two sources familiar with the matter.

The mobile chipmaker has been looking at buying various parts of Intel, which is struggling to generate cash and is looking to shed business units and sell other assets, the people said.

Intel’s client PC design business is of significant interest to Qualcomm executives, one of the sources said, but they are looking at all of the company’s design units.

Other parts of Intel, such as the server segment, would make less sense for Qualcomm to acquire, said another source with knowledge of Qualcomm’s operations.

Qualcomm has not approached Intel about a possible acquisition and declined to comment on its plans, an Intel spokesman said. Intel is “deeply committed to our PC business,” the spokesman said.

Qualcomm declined to comment.

The $184 billion Qualcomm, which is known for chips found in smartphones and counts Apple (NASDAQ: ) as a customer, has been working on plans to buy Intel parts for months. Qualcomm’s interest and plans have not been finalized and could change, according to the sources.

The two sources declined to be named because they were not authorized to discuss the matter publicly.

Intel last month reported a disastrous second quarter that included a 15 percent cut in its workforce and a pause in dividend payments. Executives are grappling with how to continue to finance the company’s production plans and generate cash.

Its PC client business revenue fell 8 percent to $29.3 billion last year amid overall weakness in the PC market.

Once known for its “Intel Inside” marketing campaign, Intel’s customer group makes laptop and desktop chips used in cars around the world. Executives said the introduction of AI PCs will drive consumers to upgrade their computers and drive more sales.

Qualcomm generated total revenue of $35.82 billion in its last fiscal year.

Earlier this week, Intel released a new PC chip called Lunar Lake, which its executives said offers superior performance for AI applications. Taiwan Semiconductor Manufacturing Co. manufactured significant portions of the chips, which Intel has historically done in-house.

Intel’s board of directors will meet next week to evaluate a proposal from Intel CEO Pat Gelsinger and other executives on how to scale back its operations in an attempt to save money. Potential options include selling its programmable chip unit Altera, Reuters reported.

(By Max A. Cherney in San Francisco and Anirban Sin, Milana Vinn and Mike Spector in New York; Editing by Kenneth Li)