Qualcomm is reportedly exploring the possibility of acquiring parts of Intel’s chip design business to enhance its product portfolio. This potential move comes as Intel faces financial difficulties, prompting the company to consider divesting certain business units and assets, according to a Reuters report.
“Qualcomm’s increasing interest in the PC chip business is no surprise,” said Sanchit Vir Gogia, chief analyst and CEO at Greyhound Research. “This addition will strengthen the Qualcomm-Microsoft relationship and build on the Surface Laptop and Pro tablet series.”
He further added, “The convergence of mobile and personal computing devices offers Qualcomm a significant opportunity to create optimized experiences across device types.”
This move comes as Qualcomm aims to strengthen its Snapdragon X series, which as Gogia notes would “sit very well” with Intel’s design capabilities, enhancing Qualcomm’s position in the AI PC space. Gogia also highlights Qualcomm’s potential to disrupt the market with aggressive pricing, posing a significant challenge to competitors like AMD and Apple.
ComputerWorld.com
With the potential acquisition, Qualcomm could significantly expand its footprint in the PC chip market, which is becoming increasingly intertwined with AI-driven computing. Gogia adds that such a deal would “allow Qualcomm to carve out a niche for supporting devices that allow AI tasks to be run without an internet connection.” This could further strengthen Qualcomm’s relationship with Microsoft, especially as both companies continue to explore opportunities in AI PCs.
Additional comments by Greyhound Research analyst:
Qualcomm’s increasing interest in the PC chip business is no surprise. Its latest launch, the Snapdragon X Plus 8-core processor, attempts to eat Intel’s and AMD’s lunch in the AI PC chip space. The company has already received support from Microsoft, which uses Snapdragon chips in Copliot + PCs.
The timing of this move is critical – while at one end, Intel is facing near-survival challenges and needs to shed weight, at the other end, there’s a rampant increase of AI at the end-point. All recent phone and broader device launches are being pinned on the very piece of technology as a differentiator.
If Qualcomm were to buy the PC design business from Intel, it would sit very well with its Snapdragon X series for PCs, which was launched last year. However, it would surely upset the Apple cart, especially for AMD, given Qualcomm’s aggressive use of pricing as a key differentiator—the Snapdragon X Plus 8-core is priced at USD 700.
If all goes well, this addition will strengthen the Qualcomm-Microsoft relationship and build on the Surface Laptop and Pro tablet series. This should allow Qualcomm to carve out a niche for supporting devices that enable AI tasks to be run without an internet connection.
The trend of AI on devices needs a few minimums for it to be a success—one of which is energy efficiency. It is important to note here that Snapdragon X is built on Arm architecture, which is purpose-built for such use cases and energy efficiency.
What makes Qualcomm well positioned for this space is the dramatic convergence of end-points spanning both mobile and personal computing devices. This could also allow the emergence of new form factors since a common bedrock of chips allows for better-optimised experiences across device types. The new form factor can include potential new competition for Apple Vision Pro devices, a device type with a promising future ahead. Qualcomm Snapdragon XR2 Plus Gen 2 serves this opportunity exceptionally well! It might help to note that the Meta Quest 3, despite being an excellent alternative, doesn’t match the might of M2 silicon from Apple and Qualcomm’s expanding presence in the space, which is very timely.
Given the recent 15% reduction in headcount and pausing of dividends, reducing any further costs will require extreme measures, such as a potential sale of the weakest business units, which happen to be PCs. However, one must keep in mind that these are mere speculations. Given Intel’s strong track record in the PC business and the potential around Lunar Lake, which is supposedly better for AI applications, the Intel board can explore alternative routes to trim costs.
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