On Friday afternoon, The Wall Street Journal reported Intel had been approached by fellow chip giant Qualcomm about a possible takeover. While any deal is described as “far from certain,” according to the paper’s unnamed sources, it would represent a tremendous fall for a company that had been the most valuable chip company in the world, based largely on its x86 processor technology that for years had triumphed over Qualcomm’s Arm chips outside of the phone space.
↫ Richard Lawler and Sean Hollister at The Verge
Either Qualcomm is only interested in buying certain parts of Intel’s business, or we’re dealing with someone trying to mess with stock prices for personal gain. The idea of Qualcomm acquiring Intel seems entirely outlandish to me, and that’s not even taking into account that regulators will probably have a thing or two to say about this. The one thing such a crazy deal would have going for it is that it would create a pretty strong and powerful all-American chip giant, which is a PR avenue the companies might explore if this is really serious.
One of the most valuable assets Intel has is the x86 architecture and the associated patents and licensing deals, and the immense market power that comes with those. Perhaps Qualcomm is interested in designing x86 chips, or, more likely, perhaps they’re interested in all that sweet, sweet licensing money they could extract by allowing more companies to design and sell x86 processors. The x86 market currently consists almost exclusively of Intel and AMD, a situation which may be leaving a lot of licensing money on the table.
Pondering aside, I highly doubt this is anything other than an overblown, misinterpreted story.
If this happens Qualcomm will be saddled with copious amounts of leveraged-buyout debt and we’ll get a crappier Qualcomm and crappier Intel.
I think you are seeing the value of the x86 license fail Intel right now. Intel’s entire business model is built around making generic one-size-fits-all processors out of it’s x86 line – commodity hardware, and it’s just not working any more. The world is in love with ARMs more customizable approach, and the foundries that build them are quite a bit more flexible than Intel’s commodity at scale model. On top of that, people are convinced that x86 is the actual problem for power efficiency (it’s not) – and it has a real impact on the market place. I don’t know how much of an asset x86 is at this point in time. I sometimes wonder how long it’ll be before AMD and Intel slap an ARM decode front end on their chips.
CaptainN-,
Intel’s strength is high end processors where power consumption doesn’t matter and/or markets where x86 software compatibility is important. But neither of these hold true on mobile and neither intel nor AMD are competitive there. The energy budget is less favorable towards processors with more transistors. Back when intel had a fab advantage, they had some extra headroom, but not any more. The factor by which they are behind on energy efficiency is greater than the factor by which they are ahead on performance.
It will be interesting to see what the future brings for intel, especially if they go fabless. AMD and apple both made this work for them. I have some reservations with what less fab competition will do to the market though.
never going to happen. If the FCC blocked the nvidia buyout after investigation , then this is a no go from the start.
Is Mr Robot at it again?
As some have pointed out Qualcomm is probably pushing “the writing is on the wall” for x86, perhaps without even knowing what Intel might have in the inventory.
It feels like a corporate game of chicken, that would require executives to blink on the Intel side of the table for Qualcomm to get a favourable outcome!