Intel’s rapid decline over the past year has led chip designer Arm to submit a buyout offer for the company’s product unit. According to Bloomberg, Arm executives have expressed interest in purchasing Intel’s most valuable product line. However, Intel rejected the offer, stating that this unit was not for sale. This information was based on a source who wished to remain anonymous.
Intel has two main units: a product group that sells PC, server and network chips, and a foundry unit that includes chip manufacturing factories. According to Bloomberg sources, Arm was not interested in Intel’s foundry unit. Both Arm and Intel officials declined to comment on this matter.
Intel’s financial situation, which has been in decline for a long time, has gained serious momentum in the last 12 months. The company, which announced a net loss of $1.6 billion in the second quarter of 2024, announced that it would lay off 15,000 employees. The move was announced as part of a $10 billion cost-cutting plan. Additionally, Intel announced plans last week to spin off its foundry business into an independent subsidiary. The company’s market value halved last year and now stands at $102.3 billion.
Arm sells its processor designs to manufacturers such as Qualcomm and Apple, and these designs are mostly used for mobile devices. However, Arm does not produce chips on its own. Acquiring Intel’s product unit would radically change Arm’s business model, but that scenario seems unlikely to happen.
Intel weakens, rivals become emboldened
Intel’s current weakness has attracted the attention of rival companies. According to a report published last week, Qualcomm is also interested in acquiring Intel. Potential mergers between companies such as Arm and Qualcomm could lead to serious regulatory hurdles. However, even the fact that such proposals are on the agenda reveals the vulnerable situation that Intel is in.
Intel is also evaluating different ways to attract investors. According to the latest news from Bloomberg, Apollo Global Management has offered to invest up to $5 billion in the company. Intel also plans to sell some of its stake in chipmaker Altera to private equity investors.