Report: ARM's intention to acquire Intel's product division was rejected

There are reports that ARM has expressed interest in acquiring Intel's chip division, but the offer was rejected.

On Friday, September 27th, according to Bloomberg citing sources, ARM had approached Intel to discuss acquiring its product division, only to be informed that the business was not for sale.

Currently, Intel has two main divisions: one for chip sales products and the other for factory operations. Bloomberg stated that ARM was interested in acquiring Intel's product division, but not the factory operations division.

As the former world's largest chip manufacturer, Intel's business has rapidly deteriorated this year, with its stock price falling by 30% and becoming the worst-performing stock in the Dow Jones Industrial Average. Intel's rapid decline has sparked speculation about a potential acquisition. In an effort to save itself, Intel announced a plan to lay off 15,000 employees, halt factory expansions, and suspend dividend payments. As part of this "self-rescue plan," Intel is separating its chip product division from its manufacturing business, a move aimed at attracting external customers and investors while paving the way for the company's split.

ARM vs. Qualcomm Competition

In addition to ARM, Qualcomm is also interested in acquiring Intel. In the early hours of September 21st, there were reports that Qualcomm had been in talks with Intel regarding an acquisition, and speculation about Qualcomm's acquisition has driven Intel's stock price up over the past week.

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 dominates the PC sector, while the Arm architecture has an advantage in the mobile device sector. If Qualcomm successfully acquires Intel, it will gain stronger competitiveness in the PC market.

On the other hand, ARM is mainly controlled by SoftBank Group, with most of its revenue coming from the sale of smartphone chip designs. Current CEO Rene Haas has been seeking to expand ARM's influence in other industries, including entering the personal computer and server markets, designing chips that can compete with Intel's products— **although Intel currently has less technological advantage than before, it still dominates the chip market in personal computers and servers Acquiring Intel's chip product division will help ARM expand its market and drive more sales of proprietary products.

Although ARM's revenue is still insignificant compared to Intel's, since its initial public offering last year, ARM's valuation has soared to over $156 billion. Investors believe that ARM is benefiting from the AI boom, especially as ARM further enters the data center chip market. Additionally, SoftBank, which holds 88% of ARM shares, can provide additional financial support to ARM. In contrast, Intel has lost over half of its market value this year, with a current market value of only $102.3 billion.

Besides the acquisition of Intel, ARM and Qualcomm themselves also face competition, as both companies aim to further dominate the PC chip market.

Qualcomm recently announced that its Snapdragon X Plus 8-core processor adopts ARM architecture, designed specifically for PCs priced as low as $700, with excellent performance in energy efficiency and battery life. Qualcomm has also established an exclusive partnership with Microsoft, with Copilot+ PCs equipped with Qualcomm X series chips.

Currently, ARM mainly licenses technology and designs to customers, who then transform them into complete components. ARM's customer list includes tech giants such as Qualcomm, Amazon, and Samsung Electronics. Under Haas's leadership, the company is gradually moving towards providing complete products, which may lead to competition with its licensed customers.

In the future, if Intel reaches acquisition agreements with ARM or Qualcomm, it could signify a significant shift in the balance of power in the PC chip market