Chip Industry Shift: Qualcomm Eyeing Intel, "Arm vs X86" Finale?

On the early morning of the 21st, reports emerged that Qualcomm had approached Intel regarding an acquisition.

If this deal is finalized, it would represent a significant shift in the computer industry.

For a long time, Intel's x86 architecture and Qualcomm's Arm architecture have been in a love-hate relationship in the chip market.

The x86 architecture has dominated the PC sector, while the Arm architecture has had an advantage in the mobile device sector.

However, with the crumbling of Intel's empire, this situation could be reversed.

Qualcomm's intention to acquire part of Intel's business will undoubtedly have a profound impact on this decades-long competitive landscape, giving Qualcomm a stronger competitive edge in the PC market.

Over the years, Intel has had a deep accumulation in the data center and server market.

x86 processors once led the PC sector.

However, in recent years, ARM architecture chips have been gradually favored by manufacturers.

Known for their high energy efficiency and low heat output, ARM chips have achieved great success in the mobile device sector.

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Qualcomm is famous for its smartphone chips but has been making continuous forays into the PC market, taking advantage of Intel's ongoing struggles.

Qualcomm recently announced its Snapdragon X Plus 8-core processor, which uses the ARM architecture and is said to be designed for PCs priced as low as $700, boasting excellent performance in terms of energy efficiency and battery life.

Qualcomm has also established an exclusive partnership with Microsoft; the Copilot+ PC is equipped with Qualcomm's X-series chips, something that neither Intel nor AMD has done in these PCs.

"This gives Qualcomm a lead of several quarters," said Mario Morales, Vice President of IDC's Support Technology and Semiconductor Group.

"However, Qualcomm has taken an early lead, but it's a long race.

Earlier this year, Microsoft launched a new generation of Surface laptops equipped with Qualcomm ARM chips, which even outperformed Apple's new MacBook's M3 chip in some performance tests, showing the competitiveness of ARM chips in the PC sector.

Analysts believe that Qualcomm's rise may signal a significant shift in the PC chip market landscape, with innovations focused on AI PCs becoming more competitive.

"If Qualcomm takes this step (acquiring Intel), it could mark a significant shift in the balance of power in the PC chip market," said Scott Dylan, founder of NexaTech Ventures.

As the mobile smartphone market becomes increasingly saturated, Qualcomm is looking for areas of growth and diversification, including attempts in the field of artificial intelligence.

Scott Dylan added that this will ultimately be a victory for Qualcomm's diversification strategy beyond mobile chipsets, "but it may also signal Intel's retreat from its once dominant position in the semiconductor market."

Earlier this month, Qualcomm CEO Cristiano Amon said in an interview with CNBC, "We are embarking on a journey of diversification and ensuring that our technology is now expanding into other markets."

He added that the PC market is undergoing "fundamental" changes for two reasons: the convergence of mobility and PCs.

People are beginning to expect the same performance in terms of battery life as they get from smartphones—and the convergence of AI and desktop computers.

Looking back at Intel, the company is at a critical crossroads.

Huge losses have forced the company to announce layoffs of more than 15% this August and to make significant strategic adjustments.

Last week, Intel's board of directors held a three-day board meeting, considering various strategic options, ranging from scaling back billion-dollar factory projects to selling off parts of its subsidiaries, including previously acquired Mobileye and Altera, and even possibly splitting the core business into independent companies.

Intel is set to release two products in the future, Lunar Lake and Panther Lake, and the market is watching to see if this will be Intel's last chance.