News Qualcomm reportedly explores buying portions of Intel's PC client business

[Admin]

Qualcomm explores ways to diversify its business into the PC space, eyes Intel's client PC unit.

Qualcomm reportedly explores buying portions of Intel's PC client business : Read more

 

[Flemkopf]

What's happening at Intel? I knew they've been struggling to get new processes up and running since 14nm and 10nm (Tick, Tock, Sproing, Thunk, Stomp, ARGH!!), but this is something else. They were generally running over a $70 billion a year revenue until Q2 '22 when it all went to pot. Now they're closer to $55 billion and cancelling projects left and right. Serious, I didn't call Intel falling apart like this.

 

[Marlin1975]

What's happening at Intel? I knew they've been struggling to get new processes up and running since 14nm and 10nm (Tick, Tock, Sproing, Thunk, Stomp, ARGH!!), but this is something else. They were generally running over a $70 billion a year revenue until Q2 '22 when it all went to pot. Now they're closer to $55 billion and cancelling projects left and right. Serious, I didn't call Intel falling apart like this.

Intel comes off like a gambling addict. They are just sure the next set of numbers will go their way. So they keep rosy appearances up while the place is on fire. Either that or the upper level executives are being lied to, or lying to us, about what's really going on.

I see their stock dropping more and maybe more fire sales and layoffs, esp if 18a is as bad as other outside firms are saying it is.

 

[Notton]

Intel client PC division is pretty vague.
Does that include an x86-64 license?
or is it on the marketing (vPro, etc.)

Also, wouldn't that be worse? Qualcomm would directly compete against itself with ARM and x86 designs.
On top of which you'll now get Qualcomm tax pricing.
$2000 for an i5? no thanks

 

[parkerthon]

What's happening at Intel? I knew they've been struggling to get new processes up and running since 14nm and 10nm (Tick, Tock, Sproing, Thunk, Stomp, ARGH!!), but this is something else. They were generally running over a $70 billion a year revenue until Q2 '22 when it all went to pot. Now they're closer to $55 billion and cancelling projects left and right. Serious, I didn't call Intel falling apart like this.

I have been waiting for the axe to fall on Intel for at least 5 years now, but kept hoping they would make a come back. If you think about it, Intel has been stagnant and heavily risk avoidant, milking their dominance in the pc/server market for decades which has contributed to their situation now. There is a long list of huge missed opportunities that they passed on mostly because they refused to accept RISC type processing is the future. Off the top of my head… taking forever to make GPU’s, partnering with Apple to make a mobile chip strike me as really bad calls. Then there is their foundry business that rapidly fell behind in the race to make traditional cpus denser. TSMC has been killing them. This was obvious years ago, but they managed to keep up appearances they could make a come back. The last straw, I think, has been their defective cpus. News articles don’t mention it, but anyone that gives a crap about stability while relying on high cpu performance thinks Intel products are toxic these days. They clearly tried to cover it up and handled pr on the issue about as poorly as any company could. It sounds like their foundry business basically fell way behind and their efforts to get it competitive with TSMC is simply not materializing in time. This plus really bad vision by their leadership has killed their outlook on all fronts. It just took investors way too long to understand how bad things had become.

Really sad. This once great American tech company is about to be stripped down by investors for parts. This will also blow a huge hole in the CHIPS act likely preventing it from ever strategically accomplishing what the US needs it to(having some global/domestic diversity in foundry supply chains). I’m in Ohio where a huge CHIPS investment was planned by Intel and residents that care about economic news are bereft by Intel’s flailing.

 

[parkerthon]

Intel client PC division is pretty vague.
Does that include an x86-64 license?
or is it on the marketing (vPro, etc.)

Also, wouldn't that be worse? Qualcomm would directly compete against itself with ARM and x86 designs.
On top of which you'll now get Qualcomm tax pricing.
$2000 for an i5? no thanks

They’ll take intel’s x86 massive customer base and gradually push customers to adopt ARM products. I think this is inevitable anyway. Windows on ARM is writing on the wall. Traditional cpus are just too power hungry for PC laptops anymore especially when you compare against Apple silicon. The only place it doesn’t make sense to use ARM is servers and workstations which are becoming less and less of a market these days anyway. That’s why they don’t want that business, but I’m not sure how they would split it apart.

 

[TheSecondPower]

Agreements with AMD mean that x86-64 ISA is not for sale. Also the "ARM and RISC are more efficient" story has been running too long. Intel started learning from RISC in the 1990s. That was 3 decades ago. The Ryzen 300 and Snapdragon X chips are nearly perfectly matched in efficiency, with the Snapdragon X sipping less power but also performing worse in many cases.

Intel has been a much better company for the PC world than Qualcomm. Developing software or operating systems to support literally every Intel and AMD CPU on the market is relatively straightforward. Whereas Linux support for Snapdragon X is being added literally one laptop at a time. And Intel's Linux GPU drivers are pretty good.

It is funny (and sad) that the US poured an enormous amount of taxpayer money into domestic foundries and now the only US processor foundry company is on the verge of financial ruin.

It's also funny that everyone is still blaming the business-degree CEOs at Intel (who I think do deserve blame for starting this problem) but no one seems to consider that if Intel's engineer CEO was a little more savvy with money, Intel would probably have cut spending before running out of money, and would be in a better position to stay afloat through the Lunar Lake, Granite Rapids, and Arrow Lake releases all the way through until Intel 18A can generate revenue.

 

[vanadiel007]

Intel is like watching a comet slowly disintegrating as it is entering the atmosphere.
I don't believe they are going to survive this one.

It would actually be exciting to see someone take over some of their business and develop something different than an Intel CPU.

Time will tell.

 

[thestryker]

It's also funny that everyone is still blaming the business-degree CEOs at Intel (who I think do deserve blame for starting this problem) but no one seems to consider that if Intel's engineer CEO was a little more savvy with money, Intel would probably have cut spending before running out of money, and would be in a better position to stay afloat through the Lunar Lake, Granite Rapids, and Arrow Lake releases all the way through until Intel 18A can generate revenue.

If you're referring to Gelsinger he's been selling off/shutting down divisions since he started. There's only so much you can cut before you start in on important parts. He probably should have suspended the dividend earlier, but that would have likely caused a stock hit they were trying to avoid. The cost of manufacturing MTL, LNL and now ARL (however much us being made on TSMC, potentially all of it) are also likely higher than anyone would have expected which cuts into margins.

 

[endocine]

Intel, sold for parts like an old PC that you don't want anymore

 

[TheSecondPower]

If you're referring to Gelsinger he's been selling off/shutting down divisions since he started. There's only so much you can cut before you start in on important parts. He probably should have suspended the dividend earlier, but that would have likely caused a stock hit they were trying to avoid. The cost of manufacturing MTL, LNL and now ARL (however much us being made on TSMC, potentially all of it) are also likely higher than anyone would have expected which cuts into margins.

I think selling off non-core businesses like Solidigm makes a lot of sense so Intel can focus on a core competency. However if Solidigm was profitable that could've been continuous income to help keep the core business afloat for now. But what I'm talking about is streamlining the core business. Intel is doing layoffs now. It sounds like Intel has been doing the same thing as its competitors but with a bigger team and more expenses. It's a hard problem but that should've started changing earlier.

 

[awake283]

Probably a silly question but where is Qualcomm getting all this capital from? Purely their 5G patents?

 

[NinoPino]

They’ll take intel’s x86 massive customer base and gradually push customers to adopt ARM products.

This is impossible. How can Intel force his customers to go with Qualcomm ?
Without considering the ARM conversion, the customers would jump immediately to AMD.

I think this is inevitable anyway. Windows on ARM is writing on the wall. Traditional cpus are just too power hungry for PC laptops anymore especially when you compare against Apple silicon.

Agree, but nobody can force the transition of Intel's customers. It is something will happen with years.

The only place it doesn’t make sense to use ARM is servers and workstations which are becoming less and less of a market these days anyway. That’s why they don’t want that business, but I’m not sure how they would split it apart.

ARM in servers is very competitive. And data center x86 revenue is huge and will remain huge for the years to come.

 

[NinoPino]

Probably a silly question but where is Qualcomm getting all this capital from? Purely their 5G patents?

Qualcomm is a BIG company. Do you forget that it produces smartphone SOCs, a lot of SOCs.

 

[paviko]

What am I missing? Intel book value is more than 100bln$, they still have cash (real cash) of more than 20bln$. Why everyone is saying this is the end? It can loose for a few years and still be alive. Raptor Lake performance is quite good, only power usage is bad. Meteor Lake, while not the best is also good and there are laptops with great battery life matching Macbook M3. Intel still sell more CPUs than AMD. Lunar Lake just announced looks fantastic. Arrow Lake around the corner.
I don't like that shareholders are/were the most important for Intel and every project below 50% margin was turned off. Maybe time to change strategy and focus on market instead of shareholders. Gross margin now below 50%, but so what...

 

[NinoPino]

Maybe this is a fake news ?
What sort of "client PC business" can Intel sell to Qualcomm that can make so much money to save Intel situation ?
The only thing Qualcomm could be interested in, is the x86 license, but how much can it be valued ?

 

[awake283]

Qualcomm is a BIG company. Do you forget that it produces smartphone SOCs, a lot of SOCs.

Thats why I asked. Other than 5G patents and semiconductors I admittedly have no idea what they do really. They work more on the enterprise level than single customer level.

 

[suryasans]

Qualcomm's dream will never happen because PC business is one of the core intel's business.

 

[Amdlova]

If intel need money they will grab from Gov and military.

 

[thestryker]

I think selling off non-core businesses like Solidigm makes a lot of sense so Intel can focus on a core competency. However if Solidigm was profitable that could've been continuous income to help keep the core business afloat for now.

Given that the floor fell out of the NAND business this was probably a very smart move. SK Hynix mostly wanted Intel's enterprise SSD business rather than the NAND technology itself.

But what I'm talking about is streamlining the core business. Intel is doing layoffs now. It sounds like Intel has been doing the same thing as its competitors but with a bigger team and more expenses. It's a hard problem but that should've started changing earlier.

If those reports are accurate and the teams are actually comparative I'd certainly have to agree. I saw the same reporting after Lip-Bu Tan stepped down, but it was all basically heresay reasoning for him stepping down. I'm not convinced that what's going on now has much of anything to do with long term business health but rather trying to appease short term "investors".

 

[-Fran-]

For this to work in Qualcomm's favour, they would need to be given access to X86 first and foremost. The "client division" from Intel would be just getting a few engineers, marketing, sales and some managerial level to link it all, but without key access to their technology it wouldn't work as plainly described. Also, correct me if I'm wrong, but don't AMD and even VIA have a say on who can get X86 stll? Specially AMD thanks to the X86-64 extensions. While AMD doesn't seem to be in an adversarial relationship with Qualcomm, I don't know if they'd want Qualcomm as a direct competitor to them. At least not right away in the consumer space for X86? They did sell part of the ATI portfolio to get some cash back to them, so they do have a history, but that's as far as I know.

This is not like IBM selling off their client division to Compaq and later Lenovo, since IBM was only designing full solutions using external parts.

I have trouble seeing what Qualcomm would get out of this?

Maybe there is* information or context missing and my interpretation of this is skewed the wrong way.

Regards.

 

[rluker5]

If intel need money they will grab from Gov and military.

As goes Intel so goes western chip making. And the world will not be able to afford TSMC shutting itself down if China makes a move.
I wonder if the chips act grants will ever be paid.

 

[Marco_il_bello]

let's try to see things in a different way, remember when 3dfx was dominating and all of a sudden it goes out of business and nvidia buys some parts if I remember correctly and then now we have the nvidia giant. Qualcomm may be the next future in my opinion

 

[hotaru251]

Intel's board is set to review further cost-cutting options

idk..maybe start cutting the CEO's enormous pay?
Why reward a guy who let this fallout happen? This is mostly on leadership failing the company.

 

[Root Canal]

Those "activist" investors maybe using Qualcomm and Broadcom to justify breaking Intel up. US chip making may suffer but those investors will gain if Intel is sold in parts.
Edit to add: This Patrick Moorhead podcast is worth watching:

View: https://youtu.be/DcODbszwxLU