Qualcomm (NASDAQ:QCOM) has considered acquiring parts of Intel's (NASDAQ:INTC) design business to strengthen its product offerings, Reuters reported on Thursday.
The mobile chipmaker has been evaluating various segments of Intel, which has been struggling with cash flow, and is exploring options to divest certain business units and assets, the report said.
Citing sources familiar with the matter, Reuters noted that Intel’s PC client design business is of particular interest to Qualcomm's leadership, though they are reviewing all of Intel’s design divisions. However, other areas, like Intel's server segment, may not align as well with Qualcomm’s strategic goals.
An Intel spokesperson reportedly said Qualcomm has not made any formal approach about an acquisition and declined to comment on any potential plans. "Intel is deeply committed to our PC business," the spokesperson added.
Qualcomm, a $184 billion company known for its smartphone chips and Apple (NASDAQ:AAPL) as a key customer, has been quietly formulating plans to acquire parts of Intel for several months. Still, Qualcomm’s intentions are still not finalized and may change, according to the report.
Last month, Intel reported a tough second quarter, including a 15% reduction in staff and a pause in dividend payments. The company is grappling with how to fund its manufacturing plans while maintaining cash flow.
Intel's PC client business saw an 8% revenue decline last year, dropping to $29.3 billion, amid a broader downturn in the PC market.
Once famous for its "Intel Inside" campaign, the company’s client division produces chips for laptops and desktops worldwide. Executives have expressed optimism that AI-powered PCs will drive consumer demand for new computers, boosting sales.
Intel’s board is scheduled to meet next week to consider a proposal from CEO Pat Gelsinger and other executives on how to streamline operations and conserve cash. One option being considered is selling its programmable chip unit, Altera, according to a prior report by Reuters.