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according to the wall street journal, people familiar with the matter revealed that qualcomm is in talks with intel about an acquisition. although current sources say the deal is "far from certain," the new york times soon confirmed the report and said that qualcomm has not yet made a formal offer to intel.

two weeks ago, the media broke the news that qualcomm was considering acquiring intel's chip design business.if this acquisition is finalized, it will also mean the end of what was once the world's largest chip giant, and the battle between x86 and arm may also end with it.

at present, neither intel nor qualcomm has responded to this matter, but even if the two sides reach an agreement, the acquisition will face challenges. after all, a transaction of this size is likely to be subject to antitrust review, and qualcomm may sell some of intel's assets and businesses to a third-party company to complete the transaction.

for qualcomm, this acquisition is also of great significance. after leading the mobile processor field for many years, it may further occupy the pc processor market.。

not long ago, intel ceo pat gelsinger issued a statement detailing intel's preparations for the next stage of transformation, which is also considered to be intel's self-rescue plan.

the biggest change in the statement is that intel's chip foundry will become an independent subsidiary, more clearly separated and independent from intel, will have its own operating committee, and independently report its own financial earnings.

in addition, the statement also stated that intel will strengthen and simplify intel's product portfolio to further "reduce costs and increase efficiency"; the factory's external expansion plans will also be adjusted and suspended; the goal is to lay off 15,000 employees by the end of this year, and more than half of it has been completed.

gelsinger said this is intel's "most important transformation in more than 40 years," and intel hasn't made such a significant decision since the transition from memory to microprocessors.

at the same time, intel signed a cooperation agreement with amazon's cloud service division aws to produce customized ai chips for it.

after intel released its second quarter 2024 earnings report, its earnings performance fell short of expectations. in order to reverse the situation, intel announced a major layoff.

last year, intel implemented a 5% layoff plan. this time, the scale of layoffs will be increased to more than 15% and is planned to last throughout the second half of 2024.

the large-scale layoffs are only a small part of the plan. the lucky employees who stay will also face a period of belt-tightening: marketing, administrative expenses, non-r&d expenses, all expenses must be cut by at least 10 billion, decreasing year by year. dividends will be suspended from the fourth quarter to improve cash flow.

this combination of punches is related to intel's performance in the first half of the year:the performance met expectations, but it was not profitable.

the ai ​​pc, which intel had high hopes for this year, performed as expected, with shipments reaching 15 million units in the first half of the year and expected to exceed 40 million units by the end of the year.

at the same time, the key chip product lunar lake will also be mass-produced ahead of schedule, which is seen as the next catalyst to accelerate the update of pc devices.

so the product performance is ok, isn't it? however, the financial report shows that the loss in the second quarter of this year reached 1.6 billion, which is 4 times that of the previous quarter.

it can only be a cost issue.

"this is painful news for me. i know it is even harder for you," intel ceo pat gelsinger said in a letter to employees.

intel ceo pat gelsinger

he attributed the poor profitability to high costs and low profit margins.

intel's revenue in 2020 was higher than in 2023, but its number of employees was lower than last year - more employees did not bring better benefits.

"we need to take bolder action to address both issues, particularly given our financial performance and outlook for the second half of 2024, which are more difficult than previously expected," he wrote in the open letter.

pat gelsinger served as ceo for about three years, and it was a very difficult period for intel. the largest chip manufacturer in the united states was facing the difficulties of transformation in the era of artificial intelligence and the pursuit of competitors.

in his eyes, maintaining personnel mobility is an important way to ensure the vitality of the company. in 2022, he revealed in an interview with the podcast decoder that 70% of intel's leadership team at the time were new.

but there is another problem: he doesn't like to train people.

“we don’t have time to say: let’s do some on-the-job training,” he said on the podcast. “we have to act, and we have to act fast.”

this large-scale layoff is, to some extent, pat kissinger's way of responding to pressure by "taking quick action."

intel is the big winner in the pc era. due to the popularity of personal computers, it has become the largest chip manufacturer in the united states.

however, after entering the era of artificial intelligence, nvidia has become famous, and tsmc and samsung have also emerged. tsmc is currently the world's number one foundry.

recently, the information revealed that openai is working with several chip design companies to develop new chips, hoping to build a new giant with a value exceeding amd, nvidia and intel.

the market is changing rapidly and intel feels a huge crisis.

in march of this year, intel received a grant of $8.5 billion from the government. this is the largest grant provided since the us passed the chips act in 2022. intel will also receive an $11 billion federal loan and a fairly generous tax credit.

the "chip act" was made possible by pat gelsinger's lobbying. however, after receiving the funding, intel's performance was not good, which undoubtedly put pressure on him.

“we need to reduce layers, stop doing unnecessary work, and foster a culture of greater ownership and accountability,” he wrote.

now, intel seems unable to cope with another rapid change in the ai ​​era.