Qualcomm explores buying part of Intel's chip design biz: Rpt.

Qualcomm (QCOM) has been exploring acquiring parts of Intel's (INTC) chip design business, according to a report from Reuters. The news comes amid news from Bloomberg that Intel has been exploring strategic options in a bid to improve the company's fortunes.

In the video above, Yahoo Finance tech editor Dan Howley discusses the report and what it could mean for the companies.

For more expert insight and the latest market action, click here to watch this full episode of Market Domination.

This post was written by Stephanie Mikulich.

Video Transcript

Well, Qualcomm is reportedly exploring the possibility of acquiring portions of Intel's design business.

It's according to a report from Reuters for more on how this could affect the chip industry.

Let's welcome in Yahoo, finance tech editor Dan Halley and Dan, obviously, there are kind of two sides to this.

There is the ongoing story of Intel's struggles and what it's going to do about it and then there's sort of the Qualcomm side of it and what it stands to gain.

So talk to us about how you're thinking about this story.

Yeah, just uh to the level said nothing's uh the confirmed here.

Uh you know, nothing out of Intel, nothing out of Qualcomm.

Um But it would be a wild story, right?

The the PC side of things uh is still Intel's biggest money maker.

And so if it ended up selling it off, it would be a completely, I mean, out of the blue almost uh move on their part at the same time, they're struggling to kind of right the ship, right?

They, they've been turning it around.

Uh Pat Eler has this massive plan they rolled out uh or rolling out five nodes uh I believe in four years uh is, is what they were doing.

Um they have uh the Foundry division that they kind of separated off and now uh is its own reporting area for, for their earnings.

They're still their own biggest customer though.

Uh Microsoft is reportedly going to be working with them on a specialized chip uh based on Intel's 18 A uh platform.

And, you know, frankly, they're, they're still far away from NVIDIA as far as catching up on the A I side of things though, they do uh offer C P US and people do use their CP US for data centers.

Uh So that, that's the Intel side of things on the Qualcomm side of things.

They've been creeping into the, the PC space uh for quite a bit.

They haven't done so successfully uh seemingly until now uh with their new snapdragon elite uh line of chips.

And so those essentially can run windows P CS, uh la laptops really uh and provide the kind of power and performance that you might expect out of Apple and its M line of chips.

So that's really kind of where they stand now.

And if they move deeper into the PC business, uh you can only imagine what it would mean for them and, and their expansion, you know, they're primarily known for building chips inside of smartphones, but smartphone sales aren't what they once were as far as upward trajectory goes.

Um And So that would be a huge move for them.

Um A few other kind of caveats here, Intel did just announce a new chip, uh their second generation core ultra line of chips that they say uh beats out Qualcomm's new PC chip.

And so they're basically saying, OK, we, we have to put out a chip that puts performance and power on the same playing field and they claim to have done that now.

Um So it, it kind of leaves you to wonder, well, will they continue to then move forward with the PC side if they have this chip that supposedly uh is, is a wonder chip uh and puts them back on a par with the likes of Apple and, and Qualcomm and, and a MD or do they just jettison this this massive part of their business?

So, you know, again, this is still a report, there's, there's nothing from Intel or Qualcomm to indicate that they're moving forward in any way with this kind of deal.

But, you know, as you said, Julie, this would be a wild shake up in the chip industry.

It would indeed, I, I mean, and already it's been a wild shake up for Intel.

I was just looking here Intel shares trading at their lowest since November of 2010 Dance.

So obviously, um investors think it needs to do something so really appreciate it.

Thank you.