Qualcomm interested in buying parts of Intel business: report

Like Intel INTC is looking for options to fix its struggling business, another chip maker is interested in buying some of its chip design units.

Qualcomm has sought to buy parts of Intel’s business months, and most of the interest is in the chip pioneer’s client PC design unit, Reuters reported, citing unnamed people familiar with the matter. The company, which designs chips for smartphones including Apple, has not brought its plans to Intel, an Intel spokesman told Reuters, adding that it is “deeply committed to our computing business.” Sources told Reuters that Qualcomm had not finalized plans and interests could change.

Neither Intel nor Qualcomm immediately responded to a request for comment.

Meanwhile, Intel is reportedly working with its longtime investment bankers at Morgan Stanley and Goldman Sachs on options to save the business after it missed revenue expectations and saw its shares fall about 60 percent by now this year.

This could include division of the foundry division that designs and produces chips, cuts plant projects and M&ABloomberg reported, citing unnamed people familiar with the matter. The potential options will be presented at a meeting of the company’s board of directors this month. However, talks with bankers are in the early stages, the people told Bloomberg.

In August, Intel saw it shares fall 27% after missing earnings expectations for the second trimester. Intel reported revenue of $12.8 billion in the second quarter of 2024 – down 1% from the previous year. Wall Street had expected $12.9 billion, according to FactSet analysts’ estimates.

The chipmaker’s missed profit expectations were partly due to its decision to “scale faster” its Core Ultra AI processors, or core processing units, that can handle AI applications, Intel’s chief executive said. Pat Gelsinger on the company’s earnings call. Gelsinger also announced the company’s plans to cut expenses, including laying off more than 15 percent of its employees.

“Put simply, we need to align our cost structure with our new operating model and fundamentally change the way we operate,” Gelsinger wrote in a memo to employees. “Our revenue has not grown as expected – and we are still not fully benefiting from strong trends such as AI. Our costs are too high, our margins are too small. We need bolder action to address both – particularly given our financial results and outlook for the second half of 2024, which is tougher than previously expected.”