Intel Reportedly Rejects Arm's Approach to Acquire Product Division

Questionable report claims Arm approached Intel to buy products group and got rejected

Arm Holdings reportedly approached Intel Corp. with interest in acquiring Intel's product division, which develops and sells processors for PCs, servers, and networking gear. Intel declined, stating the division is not for sale, reports Bloomberg. Arm purportedly was not interested in Intel's manufacturing assets. However, there are plenty of reasons to question the claims, with the least of them being whether or not any such acquisition or merger could get past regulatory agencies. Even if Western agencies ruled favorably, China's regulatory agencies have been unforgiving during the current trade war. That's not to mention that the prospect of Arm buying the holder of a war chest worth X86 patents only further makes this scenario completely unlikely. Arm's inquiry supposedly targeted Intel's chip product group, aligning with its strategy to expand beyond its traditional smartphone chip design business and grow its presence in personal computers and servers. While the company plans to address PCs and data center platforms, it still has to gain a presence in both markets, so buying its way into them could have some rationale. With its focus on expanding into new markets, Arm's potential acquisition of Intel's Client Computing Group (CCG) and Data Center and AI (DCAI) divisions would have helped further its strategy to offer more complete products. On the other hand, Intel's client and data center products compete against those developed by Arm's customers using its cores or instruction set architecture, so Arm's existing clients would not be happy with such an acquisition. It would also ensure intense regulatory scrutiny that would likely scuttle such a deal. Arm, majority-owned by SoftBank Group, has seen its valuation rise dramatically to over $156 billion since going public last year. This growth is fueled by the company's increasing presence in data center CPUs, investor optimism regarding the AI boom, and Arm's ongoing expansion strategy. On the other hand, Intel has seen its market value plummet by more than half this year, with its current valuation at $102.3 billion. As a result, from a market capitalization point of view, Arm is a bigger company than Intel. Fortunately, the industry does not rely on market capitalization alone. Even after separating or discontinuing multiple businesses (3D NAND, SSDs, Optane drives and modules, network switches, PC modems, pre-built servers, and cryptocurrency mining products), Intel's revenue in 2023 was $54.22 billion, with trailing twelve-month revenue of $55.12 billion. By contrast, Arm's 2023 revenue totaled $2.93 billion, and its TTM revenue is $3.49 billion. Although Arm's business is growing, its market share is increasing, and Intel's revenue is stagnating as its share in the data center market declines, Intel is still much larger than Arm. Intel's data center group's Q2 2024 revenue of $3 billion is higher than Arm's entire revenue for 2023. Since Arm is massively smaller than Intel, it cannot buy the blue giant's profitable CCG and DCAI product units. As a result, there is doubt that Arm has even approached Intel about this potential transaction. On the other hand, if Intel would like to buy Arm, one good way to do so would be a reverse takeover. But there is a major problem with this idea. It should be noted that Arm has its own instruction set architecture that it develops and licenses and this ISA competes against Intel's x86. Intel has developed x86, and currently, just a few companies have a license to design and sell x86 processors: AMD, Via Technologies, and Zhaoxin (which got it from Via Technologies due to the Centaur transaction). While technically AMD, Via, and Zhaoxin can contribute to the development of x86, Intel remains the biggest maker of x86 processors and x86 contributors. That said, if Arm is to buy Intel (or Intel takes over Arm via a reverse takeover), the transaction would face enormous scrutiny from antitrust regulators as the new entity would control two of the world's most used ISAs.

Intel rejects Arm's approach for product division, Bloomberg News reports

Sept 26 (Reuters) - Arm Holdings approached Intel (INTC.O), opens new tab about potentially acquiring the company's product division but was told that the business is not for sale, Bloomberg News reported on Thursday. The British chip firm did not express interest in Intel's manufacturing operations, the report added, citing a person familiar with the matter. The report did not mention any financial details, nor did it say whether the talks are still ongoing or have been abandoned. Advertisement · Scroll to continue Arm declined to comment on the report, while Intel did not immediately respond to a request for comment outside regular business hours. Once the dominant force in chipmaking, Intel ceded its manufacturing edge to Taiwanese rival TSMC (2330.TW), opens new tab and failed to produce a widely desired chip for the generative AI boom capitalized on by Nvidia (NVDA.O), opens new tab and AMD (AMD.O), opens new tab. Qualcomm has also approached Intel to explore a potential acquisition of the troubled chipmaker, Reuters reported earlier this month, in what could be a transformational deal in the sector. Advertisement · Scroll to continue Intel has been attempting to turn its business around by focusing on AI processors and creating a chip contract manufacturing business, known as a foundry. The company plans to pause construction on factories in Poland and Germany, and reduce its real estate holdings. Reporting by Gursimran Kaur in Bengaluru; Editing by Nivedita Bhattacharjee and Savio D'Souza Our Standards: The Thomson Reuters Trust Principles., opens new tab

Intel rejected Arm's approach to buy product unit- report By Investing.com

Investing.com -- Arm Holdings Plc (NASDAQ:ARM) approached Intel Corp (NASDAQ:INTC). to explore the possibility of acquiring its struggling product division, but Intel responded that the unit was not up for sale, Bloomberg News reported on Friday, citing a source with direct knowledge of the matter. The source, who requested anonymity due to the confidential nature of the discussions, said that Arm was not interested in Intel's manufacturing operations. Intel is split into two key divisions: a product group that develops chips for PCs, servers, and networking equipment, and a second division that manages its factories. Once the world's leading chipmaker, Intel has faced takeover speculation following a sharp decline in its business performance this year. The company recently reported disappointing earnings, resulting in the steepest decline in its share price in decades. Along with cutting 15,000 jobs to reduce costs, scaling back factory expansion, and suspending its long-standing dividend. As part of its restructuring efforts, Intel is separating its chip product division from its manufacturing operations. This move is designed to attract external customers and investors, but it also paves the way for a potential company split, according to a Bloomberg report from last month. Arm, majority-owned by Japan's SoftBank Group Corp. (TYO:9984), generates most of its revenue from licensing chip designs for smartphones. However, CEO Rene Haas has been working to expand Arm's presence beyond that market, particularly in the PC and server sectors, where it competes directly with Intel. Although Intel has lost some of its technological advantage, it still dominates these markets. A potential partnership with Intel would expand Arm's market reach and boost its move toward selling more complete products. Currently, Arm licenses its designs to other companies, which then build the final components. Arm's clients include major technology companies like Amazon (NASDAQ:AMZN), Qualcomm (NASDAQ:QCOM), and Samsung (KS:005930). Under Haas's leadership, Arm has been shifting toward offering more fully developed products, which could bring it into competition with its current licensees. Despite its smaller size, Arm's market value has surged following its IPO last year, reaching over $156 billion. Investors view the company as a key player in the growing AI market, especially as it increases its focus on data center chips. With an 88% stake owned by SoftBank, Arm also has considerable financial backing, the report said. In contrast, Intel has seen its market capitalization fall by more than half this year, now standing at $102.3 billion. Still, Intel has other options. Apollo Global Management (NYSE:APO) Inc. recently offered to invest up to $5 billion in the company, signaling support for CEO Pat Gelsinger, the report said. Additionally, Intel is planning to sell part of its stake in Altera Corp., a semiconductor firm it bought in 2015, to private equity investors. Intel separated Altera from its operations last year with plans to take it public. Recent speculation about a Qualcomm acquisition has also provided a boost to Intel's stock price, the report added.

Intel rejects Arm's approach for product division, Bloomberg News reports

(Reuters) - Arm Holdings approached Intel about potentially acquiring the company's product division but was told that the business is not for sale, Bloomberg News reported on Thursday. The British chip firm did not express interest in Intel's manufacturing operations, the report added, citing a person familiar with the matter. The report did not mention any financial details, nor did it say whether the talks are still ongoing or have been abandoned. Arm declined to comment on the report, while Intel did not immediately respond to a request for comment outside regular business hours. Once the dominant force in chipmaking, Intel ceded its manufacturing edge to Taiwanese rival TSMC and failed to produce a widely desired chip for the generative AI boom capitalized on by Nvidia and AMD. Qualcomm has also approached Intel to explore a potential acquisition of the troubled chipmaker, Reuters reported earlier this month, in what could be a transformational deal in the sector. Intel has been attempting to turn its business around by focusing on AI processors and creating a chip contract manufacturing business, known as a foundry. The company plans to pause construction on factories in Poland and Germany, and reduce its real estate holdings. (Reporting by Gursimran Kaur in Bengaluru; Editing by Nivedita Bhattacharjee and Savio D'Souza)

Arm Is Rebuffed by Intel After Inquiring About Buying Product Unit

(Bloomberg) -- Arm Holdings Plc approached Intel Corp. about potentially buying the ailing chipmaker's product division, only to be told that the business isn't for sale, according to a person with direct knowledge of the matter. In the high-level inquiry, Arm didn't express interest in Intel's manufacturing operations, said the person, who asked not to be identified because the discussions were private. Intel has two main units: a product group that sells chips for personal computers, servers and networking equipment, and another that operates its factories. Representatives for Arm and Intel declined to comment. Intel, once the world's largest chipmaker, has become the target of takeover speculation since a rapid deterioration of its business this year. The company delivered a disastrous earnings report last month -- sending its shares on their worst rout in decades -- and is slashing 15,000 jobs to save money. It's also scaling back factory expansion plans and halting its long-cherished dividend. As part of its turnaround efforts, Intel is separating the chip product division from its manufacturing operations. The move is aimed at attracting outside customers and investors, but it also lays the groundwork for the company to be split up -- something Intel has considered, Bloomberg reported last month. Listen to the Here's Why podcast on Apple, Spotify or anywhere you listen. Arm, which is majority-owned by SoftBank Group Corp., makes much of its revenue selling chip designs for smartphones. But Chief Executive Officer Rene Haas has sought to broaden its reach outside of that industry. That's included a push into personal computers and servers, where its chip designs are going up against Intel's. Though Intel doesn't have the technological edge it once held, the Santa Clara, California-based company remains dominant in those markets. Combining with Intel would help Arm's reach and kick-start a move toward selling more of its own products. The company currently licenses technology and designs to customers, who then turn them into complete components. Its client list includes the biggest names in technology, such as Amazon.com Inc., Qualcomm Inc. and Samsung Electronics Co. Under Haas, the company has moved more in the direction of offering fully formed products -- potentially putting it in competition with its licensees. Arm, based in Cambridge, England, only has a fraction of the revenue of Intel. But its valuation has soared since an initial public offering last year and now stands at more than $156 billion. Investors see the company as a beneficiary of the AI spending boom, especially as it moves further into data center chips. Arm also has the backing of Japan's SoftBank, which owns an 88% stake, potentially giving the company additional financial clout. Intel, in contrast, has lost more than half its value this year and has a current market capitalization of $102.3 billion. But the company has other options to consider. Apollo Global Management Inc. offered to make an investment in the company, Bloomberg reported this week. The firm indicated in recent days that it would be willing to put in as much as $5 billion, marking a vote of confidence for CEO Pat Gelsinger. Intel also plans to sell part of its stake in semiconductor maker Altera Corp. to private equity investors. That business, which the chipmaker bought in 2015, was separated from Intel's operations last year with the goal of taking it public. And speculation of a Qualcomm takeover boosted Intel shares in the past week. --With assistance from Caroline Hyde. (Updates with Apollo offer and other options starting in 10th paragraph.)

Intel rebuffs British semiconductor darling Arm over plans to buy chunk of chipmaker

The group approached Intel about the prospect of buying up its product unit, Bloomberg reported citing someone with direct knowledge of the matter. However, Intel reportedly told Arm the unit wasn't for sale. The high-level inquiry focused on Intel's product group, which sells chips for personal computers, rather than the company's manufacturing operations. A representative for Arm declined to comment. A representative for Intel didn't immediately respond to Fortune's request for comment. Intel effectively split its product and manufacturing divisions earlier this year into Intel Foundry and Intel Product in a bid to create more chips for customers, akin to world leader TSMC. The group partnered with Arm in February on a vague "Emerging Business Initiative" that would see Intel work with startups developing Arm-based system chip processors. Arm CEO Rene Haas described the partnership as "a bit of strange bedfellows." Now, however, Softbank-owned Arm appears to want more of Intel's business. Arm licenses its cutting-edge chip designs to customers, supplying groups including Apple, Nvidia, and Microsoft. Its technology mainly goes into smartphones, but the group is keen to expand into computer processing units, competing with Intel. Buying up Intel's product division would help Arm pivot to selling more of its own products rather than solely selling licenses, something Haas is keen to do to help Arm rival other major AI players like Nvidia. Arm went public on the Nasdaq last year through a blockbuster $55 billion IPO, by far the biggest of 2023. Shares were massively oversubscribed on launch day, sending its value up by 25%. It has gone from strength to strength in 2024, more than doubling in value this year. Intel, meanwhile, has had a torrid year set off by disastrous financial results released in August. The company suspended its dividend and pledged to slash 15,000 jobs as part of a plan to save $10 billion in costs next year. The company has also reigned in manufacturing plans, delaying a $33 billion factory in Germany by up to two years. While shares in Arm have more than doubled in 2024, Intel's have nearly halved amid major pessimism over the chipmaker's direction. Arm is currently worth around $17 billion more than Intel, which was once the world's largest chipmaker and worth $503 billion back in 2000, after leapfrogging the company over the summer.