SAN FRANCISCO, Sept 21 (Reuters) – Chip giant Qualcomm has reportedly sounded out rival chipmaker Intel about a possible takeover, but has yet to make a formal proposal.
Multiple reports on Saturday said Qualcomm was considering an “outright acquisition” of the U.S. chipmaker.
The Wall Street Journal reported that the two companies are in talks about the matter, though a deal is “by no means certain.”
Both Qualcomm and Intel declined to comment on the report.
Intel, which has a market capitalization of about $93 billion, has seen its shares plummet more than 40% in the last year, while Qualcomm’s shares have risen 55% to a market capitalization of $169 billion.
Intel lost a major customer in 2020 as iPhone maker Apple shifted from Macs to its own silicon chips based on the ARM architecture.
While U.S. companies still dominate the PC market with their own chips, original equipment manufacturers are rapidly adopting the ARM architecture.
Compared to Intel x86, the ARM architecture is more efficient in terms of energy consumption and heat.
The New York Times reported that “Qualcomm has not yet made a formal proposal to Intel.”
Meanwhile, Intel plans to lay off more than 15,000 employees and suspend “non-essential operations.”
Intel CEO Pat Gelsinger said the company would shut down all non-essential operations and later announced it would spin off its chip-making business.
According to market analyst Omdia, Intel is at risk of losing its third place in terms of sales in the third quarter (Q3) for the first time to South Korean chip giant SK Hynix.
U.S. artificial intelligence (AI) chip maker Nvidia is expected to maintain its top spot with quarterly sales of $28.1 billion, while South Korean tech giant Samsung Electronics is expected to take second place with record quarterly sales of $21.7 billion.
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