1 week Ago By David Richards
PC manufacturers and retailers in Australia, selling Intel powered PC’s, are facing the real possibility that tens of millions in Intel Inside marketing dollar support, are set to be slashed as the big US processor manufacturer faces massive problems, including lost market share to the likes of Qualcomm. Basically the chips are down at Intel with arch rival Qualcomm circling the business, Intel who has been a massive funder of PC manufacturers who in turn have spent millions on instore displays and Co Op funding now slashing costs with Intel executives at IFA telling ChannelNews that “Marketing is one of many areas of the business where cuts are being made”. Currently Intel hands out marketing dollars to PC Companies to promote PCs with most advertising featuring an Intel logo.
Insiders are telling ChannelNews that if these budgets are halved it will have a major impact in the consumer electronics market spanning B2B, gaming and consumer PC categories. On the upside PC manufacturers who have been taking marketing dollars from AMD for decades are now getting money out of Qualcomm who are battling Intel in the AI PC market. Overnight Apollo Global Management offered to invest billions in the embattled chip giant who is losing share to the likes of Qualcomm who insiders claim is looking at putting together a takeover offer for Intel.
It’s unclear at this stage whether Intel would proceed with either deal. If Qualcomm, who rolled out their own AI processor for PC’s were to proceed it presents huge hurdles for the Company not only from a monopoly regulatory standpoint, they would also have to make a decision as to whether they keep Intel foundries or cut deals with foreign Companies such as Samsung and the Taiwanese Manufacturing Company to manufacture their processors..
The New York Times said recently that Qualcomm is best known for chips used in mobile phone technology and it doesn’t make its own processors. That raises a question about whether it would want to buy Intel’s foundry business, which makes semiconductors for outside clients. (Uncertainty over the foundry unit would be troubling for the Biden administration, whose domestic chip revival plans hinge in part on the Intel division’s success.
) Buying Intel, whose market value on was A$138 billion, could also be challenging to finance making with the Companies shares rising further overnight 3.36%. Observers claim that antitrust scrutiny is the biggest obstacle for any Company looking to go after Intel.
Some experts contend that Intel and Qualcomm have limited overlap. But uniting two of America’s biggest chipmakers could be a nonstarter for regulators claims the NYT. One thing Qualcomm won’t do, according to The Financial Times, is make a hostile bid.
Pursuing one would introduce more issues ...
as Broadcom discovered when it went hostile on Qualcomm years ago. Apollo is seeking to make a big investment in Intel, according to Bloomberg, which the firm has reportedly pitched as a vote of confidence in the company’s turnaround plan. The deal could be similar to the investment that Apollo helped lead into the hard-drive maker Western Digital last year.
The investment interest raises other questions. What would happen in a takeover to the billions in subsidies that Intel has been promised via the CHIPS and Science Act? And how far would the Biden administration go to protect a company it seems to view as a key component of manufacturing national security?.
