Qualcomm explores potential Intel takeover, WSJ reports

On Friday, *The Wall Street Journal* reported that Qualcomm has approached Intel about a possible takeover, sparking speculation about the future of the rivalry between Arm and x86 processors. According to the paper’s unnamed sources, while any deal remains “far from certain,” it could signify a major downturn for Intel, once the world’s leading chipmaker, whose success was built on its x86 technology, which for years outperformed Qualcomm's Arm chips outside the mobile sector.

The *New York Times* later corroborated the report, stating that “Qualcomm has not yet made an official offer for Intel.” Should a deal go ahead and pass regulatory hurdles, it would mark a significant victory for Qualcomm, which recently re-entered the desktop processor market as part of Microsoft’s AI-driven PC strategy, after years of dominance in mobile processors.

Intel, however, finds itself in a weakened position. Despite maintaining profitability in some areas, the company reported a $1.6 billion loss earlier this year and responded by cutting costs, shifting strategies, and reducing its workforce by over 15%. In August, CEO Pat Gelsinger announced that Intel would halt all non-essential operations and spin off its chipmaking business — a segment once viewed as a competitive advantage against rivals such as AMD, which relies on companies like Taiwan's TSMC for silicon production.

Intel has also started relying on TSMC for its most advanced chips, contributing to its recent financial struggles. The company’s own 18A manufacturing process has reportedly encountered issues, adding to Intel’s woes. Meanwhile, its biggest rival, AMD, has managed to turn its fortunes around, with strong support from gamers and dominance in major gaming consoles, including PlayStation and Xbox, leaving Intel to miss out on opportunities such as the PlayStation 6.

Additionally, Intel has faced setbacks with PC gamers after two of its flagship chip generations were found to have vulnerabilities causing crashes, though the company has extended warranties and issued updates to mitigate the damage. 

Intel’s difficulties go beyond manufacturing and profits; the company has yet to establish itself as a significant player in AI server chips, a market dominated by Nvidia. Even its attempts to produce GPUs for gamers and creators have not gained much traction.

As Qualcomm, AMD, and Apple grow in the laptop market, Intel has twice revamped its approach to flagship laptop chips to compete with their perceived battery life and integrated graphics advantages. The performance of Intel’s upcoming Lunar Lake chips, set to debut in October, could be crucial in determining its future.