Intel faces the risk of being acquired due to strategic mistakes?

Chipmaker Qualcomm has been contemplating a complete acquisition of Intel, a renowned company known for its computer processors, in a surprising turn of events. The Wall Street Journal reported that while a deal is not certain, discussions on the matter have taken place between the two companies.

Intel, currently valued at $87 billion, has been experiencing significant challenges in recent years. The company's stocks have plummeted by 60% this year alone. In 2020, Intel suffered a setback when it lost Apple as a customer due to the transition from Macs to Apple Silicon chips based on the ARM architecture. Additionally, Intel has been disappointing PC customers with its latest processors.

In 2023, Intel attempted to acquire Tower Semiconductor in a bid to enhance its competition with TSMC, the company responsible for manufacturing chips for various firms, including Apple and Nvidia. However, the deal failed to obtain regulatory approval. The Wall Street Journal points out that a potential deal between Qualcomm and Intel also faces a high risk of being halted.

One way to potentially finalize the deal would be for Qualcomm to sell off assets or portions of Intel to other buyers, as mentioned in the report. In 2019, Apple acquired Intel's modem division for $1 billion.

While Intel still dominates the PC market with its chips, it's evident that PC manufacturers are increasingly interested in investing in ARM chips. In terms of energy consumption and thermal efficiency, the ARM architecture is more effective compared to x86. Earlier this year, Microsoft introduced new Surface laptops with Qualcomm ARM chips that even outperformed Apple's base M3 chip in certain benchmark tests.

It remains uncertain whether Intel will agree to engage in discussions for a potential deal with Qualcomm, but if it materializes, it would signify a significant shift in the computer industry. And as always, remember to use our comparator to so that you can find the best deals for your next favorite game.