Qualcomm Reportedly Considering Buying Parts of Intel

Qualcomm (QCOM) shares fell following a report that the company has looked into buying segments of Intel (INTC), potentially including its PC chip design business.

Reuters on Friday reported that the maker of semiconductors for mobile devices has explored the idea of purchasing different parts of Intel. One of its sources said that the PC design unit is of “significant interest,” although they are considering all of Intel’s design operations.

Possible Deal Activity for Intel

The report is the latest to describe possible deal activity for Intel, which is seeking to reinvigorate interest in its shares. One recent story indicated that it might sell some of its stake in MobilEye (MBLY); another discussed options regarding its foundry business. Intel’s shares were recently down about 2%, while Qualcomm’s were off more than 3%.

Reuters’ Friday story quoted an Intel spokesperson as saying Qualcomm has not approached the company about any acquisitions, and that Intel is “deeply committed” to its PC business. Qualcomm did not immediately respond to Investopedia’s request for comment.

Shares of Qualcomm are up some 9% year-to-date, while Intel shares have lost about 60% of their value.

The Potential Acquisition

The potential acquisition of parts of Intel by Qualcomm, including its PC chip design business, could have significant implications for both companies.

For Qualcomm, acquiring Intel’s PC chip design business would allow the company to expand its presence in the PC market. Currently, Qualcomm is primarily known for its mobile device semiconductors, but entering the PC chip design space could open up new opportunities for growth and diversification.

Intel, on the other hand, has been facing challenges in recent years, particularly in the PC market. The company has been struggling to compete with rival chipmakers, and its shares have seen a significant decline in value. Selling parts of its business to Qualcomm could help Intel streamline its operations and focus on its core strengths.

Market Reaction

The news of Qualcomm’s potential interest in buying parts of Intel had an immediate impact on the stock prices of both companies. Qualcomm shares fell more than 3%, while Intel shares were down about 2%.

Investors are likely reacting to the uncertainty surrounding the potential deal and the implications it could have for both companies. While Qualcomm’s interest in expanding into the PC chip design business could be seen as a positive move, there are also risks involved in such a significant acquisition.

Additionally, Intel’s commitment to its PC business and the potential sale of its stake in MobilEye indicate that the company is actively exploring strategic options to revive interest in its shares. Investors will be closely watching for any further developments and announcements from both Qualcomm and Intel.

Conclusion

The report of Qualcomm’s interest in buying parts of Intel, including its PC chip design business, highlights the ongoing consolidation and strategic moves within the semiconductor industry. As technology continues to evolve, companies are looking for ways to stay competitive and adapt to changing market dynamics.

For Qualcomm, acquiring Intel’s PC chip design business could provide new growth opportunities and diversification. For Intel, selling parts of its business could help streamline operations and refocus on core strengths.

However, it’s important to note that these reports are still speculative, and no official announcements have been made by either company. Investors should closely monitor the situation and consider the potential risks and rewards associated with any potential deal.

Overall, the semiconductor industry is undergoing significant changes, and companies like Qualcomm and Intel are actively exploring strategic options to position themselves for future success.

Disclaimer: The information provided in this article is for informational purposes only and should not be considered as investment advice. Investing in stocks carries a certain level of risk, and investors should always do their own research and consult with a financial advisor before making any investment decisions.

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