It has been reported that Qualcomm, one of the world’s leading semiconductor manufacturers, has begun negotiations to acquire Intel. This information was made public by the Wall Street Journal, while it was also emphasized that a possible deal is not yet certain. Such a move by Qualcomm could create a major change in the technology world. The fact that Intel, once the most powerful company in the chip world, is still seen as a major player despite its weakened position today explains Qualcomm’s interest.
Qualcomm, which has been successful in the mobile processor market for years with its Arm-based technology, has struggled to compete with Intel’s x86 architecture. However, this potential acquisition could be critical to Qualcomm’s goal of gaining a significant share of the desktop and server market. Qualcomm’s interest in Intel comes at a time when Microsoft is starting to regain strength in the desktop processor market in line with its AI-focused strategies.
Intel’s bad process
Intel has faced many challenges in recent years. Although the company was once the most valuable name in the semiconductor world, it has recently been experiencing serious financial difficulties. In mid-2023, the company announced that it would lay off approximately 15,000 employees and completely stop some of its businesses. Intel CEO Pat Gelsinger also announced that the company is entering a strategic restructuring process. As part of this process, Intel is preparing to separate its chip manufacturing activities, which it has long touted as one of its greatest strengths, into a separate business unit.
Intel’s ability to produce chips in its own factories, once its greatest advantage, has fallen behind its competitors in recent years. The company has had to rely on external sources such as Taiwan-based TSMC to produce its latest generation chips. This is one of the factors that has increased Intel’s costs and reduced its profitability. Problems in the 18A production process are also making it difficult for Intel to recover.
Qualcomm’s targeting of Intel during this weak period has drawn attention in the technology world as well as in many sectors. Qualcomm aims to have a greater say, especially in the desktop computer market. Microsoft’s AI-supported computer strategy is seen as part of this goal.
Intel, on the other hand, has been struggling with various mistakes and difficulties during the same period. The company has also lost power in the gaming world recently. While AMD has a large share in gaming consoles, it is known that Intel has not achieved the success it wanted in this market. Intel, which missed the opportunity especially for PlayStation 6, has fallen behind its competitors in this area. In addition, the performance problems and sudden crashes experienced in the two-generation processors it produced for PC games have shaken the company’s reputation. Although updates have been released to fix these problems, it seems that it will not be easy to regain users’ trust.
Intel’s failure to achieve the desired leadership in the AI server chip market is among the other factors affecting the company’s overall performance. Nvidia’s great dominance in this area has weakened Intel’s competitive power. Similarly, Intel, which has failed to create the expected impact in the desktop graphics processor market, has been overshadowed by strong competitors such as AMD and Nvidia in this market.
Finally, it is known that Intel is also struggling in the laptop processor market. The high performance and energy efficiency offered by Apple’s M1 and M2 processors also threaten Intel’s share in the laptop market. Qualcomm and AMD also stand as strong competitors against Intel in this area with their advanced products. It is a matter of curiosity how Intel’s new Lunar Lake processors, developed in response to these threats, will perform in the coming period.
In this process where Intel is going through a weak period, a possible acquisition attempt by Qualcomm seems to have significant repercussions in the technology world. However, whether such a deal will happen or not will become clear, especially as a result of the evaluations of the competition authorities.