Broadcom reportedly investigates acquiring Intel’s chip design biz
(2025/02/17)
- Reference: 1739775672
- News link: https://www.theregister.co.uk/2025/02/17/intel_acquisition_speculation/
- Source link:
Broadcom is reportedly contemplating a play for Intel.
The Wall Street Journal [1]reports that Broadcom has closely examined Intel’s chip design and marketing businesses with a view to a possible acquisition, conditional upon someone else taking on Intel’s foundry business.
Broadcom already has a very substantial chip design business of its own but prefers to outsource manufacturing. It’s hard to imagine the company would change that strategy.
[2]
The Hock Tan-led company also has a history of acquiring outfits whose products are so deeply embedded in enterprise IT stacks that users are unlikely to replace them.
[3]
[4]
Intel, like past Broadcom acquisitions [5]VMware and [6]CA Technologies , meets that description as its Xeon processors dominate many datacenters. Plenty of enterprises have built their tech stacks on the x86 architecture and the Xeon ecosystem. Few will be able to adopt a replacement in a hurry.
Intel also offers Broadcom another thing it covets: Subscription revenue.
[7]
Readers may recall that in 2022 Chipzilla introduced [8]“software-defined silicon” in the form of a scheme called “Intel on Demand” that made it possible to activate features of Xeon processors upon payment of additional fees. The tech debuted in 4th Gen Intel Xeon Scalable processors and currently allows features such as software guard extensions and RAID to be switched on by making an extra payment after acquiring a processor.
The Register fancies Broadcom would make Intel on Demand a more prominent feature of its processors under its business model that Netflix, in an unflattering assessment of the company filed in a lawsuit, described as “Buy. Chop up. Sell off. Raise prices. Rinse. Repeat.”
[9]Intel loses another exec as datacenter, AI chief named Nokia CEO
[10]Intel knocked off global chip revenue top spot after rotten 2024
[11]Intel sinks $19B into the red, kills Falcon Shores GPUs, delays Clearwater Forest Xeons
[12]Want Intel in your Surface? That’ll be $400 extra, says Microsoft
The “raise prices” part of that model would not be sensible for Intel’s desktop chips, which are already struggling to compete on features and price with product from AMD and Qualcomm. But the “Chop up. Sell off.” tactics could come into play if Broadcom decides it would rather not contest the drooping PC market.
Intel’s current market capitalization is just over $100 billion, and Broadcom would pay less for its chip design arm alone – perhaps a smaller sum than the $61 billion it paid for VMware.
That deal saw Broadcom [13]cut costs, improve margins and boost profits to a greater extent than it initially thought possible, perhaps giving the company confidence its acquisition methodologies are sufficiently efficient it could swallow Intel. Increasing acquisition costs was a big contributor to that achievement.
[14]
Other speculation about the semiconductor giant’s fate includes the possibility its fabrication business could be sold to a consortium that includes Taiwan’s TSMC. Any sale of Intel’s chip factories would need regulatory approval in many jurisdictions. A deal could prove especially contentious in Washington, where the Trump administration has signalled its displeasure with the CHIPS Act that funnelled billions to Intel and other chipmakers to fund their build of semiconductor fabs in the USA.
Nvidia disarms, a bit
In other semiconductor ownership news, a Valentines Day [15]filing from Nvidia reveals the AI hardware giant sold 44 percent of its shares in chip designer Arm.
Nvidia packs its Grace superchips full of Arm CPUs and is rumoured to be creating an Arm-based PC processor, so selling some shares is not necessarily an indication of displeasure with the UK-based chip design firm. It’s more likely just Nvidia rebalancing its asset portfolio, evidence of which can be seen in the fact the same filing records it sold all its shares in three other companies, and picked up its first stakes in datacenter operator Applied Digital and an outfit called Recursion Pharmaceuticals. ®
Get our [16]Tech Resources
[1] https://www.wsj.com/tech/broadcom-tsmc-eye-possible-intel-deals-that-would-split-storied-chip-maker-966b143b?st=RiRV14&reflink=desktopwebshare_permalink
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Z7MW1zK4FuHbq-6fef5sDgAAAM8&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Z7MW1zK4FuHbq-6fef5sDgAAAM8&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Z7MW1zK4FuHbq-6fef5sDgAAAM8&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://www.theregister.com/2023/11/23/broadcom_vmware_reorg/
[6] https://www.theregister.com/2018/07/12/broadcom_ca_technologies/
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Z7MW1zK4FuHbq-6fef5sDgAAAM8&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[8] https://www.theregister.com/2022/11/22/intel_reveals_paid_xeon_features/
[9] https://www.theregister.com/2025/02/10/intel_hotard_nokia/
[10] https://www.theregister.com/2025/02/04/intel_chip_revenue_rankings/
[11] https://www.theregister.com/2025/01/31/intel_q4_2024/
[12] https://www.theregister.com/2025/01/30/microsoft_surface_intel/
[13] https://www.theregister.com/2024/12/13/broadcom_q4_fy_2024_vmware/
[14] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Z7MW1zK4FuHbq-6fef5sDgAAAM8&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[15] https://d18rn0p25nwr6d.cloudfront.net/CIK-0001045810/6596dc52-7fd9-4774-bf05-1a99a5dd8b6d.pdf
[16] https://whitepapers.theregister.com/
The Wall Street Journal [1]reports that Broadcom has closely examined Intel’s chip design and marketing businesses with a view to a possible acquisition, conditional upon someone else taking on Intel’s foundry business.
Broadcom already has a very substantial chip design business of its own but prefers to outsource manufacturing. It’s hard to imagine the company would change that strategy.
[2]
The Hock Tan-led company also has a history of acquiring outfits whose products are so deeply embedded in enterprise IT stacks that users are unlikely to replace them.
[3]
[4]
Intel, like past Broadcom acquisitions [5]VMware and [6]CA Technologies , meets that description as its Xeon processors dominate many datacenters. Plenty of enterprises have built their tech stacks on the x86 architecture and the Xeon ecosystem. Few will be able to adopt a replacement in a hurry.
Intel also offers Broadcom another thing it covets: Subscription revenue.
[7]
Readers may recall that in 2022 Chipzilla introduced [8]“software-defined silicon” in the form of a scheme called “Intel on Demand” that made it possible to activate features of Xeon processors upon payment of additional fees. The tech debuted in 4th Gen Intel Xeon Scalable processors and currently allows features such as software guard extensions and RAID to be switched on by making an extra payment after acquiring a processor.
The Register fancies Broadcom would make Intel on Demand a more prominent feature of its processors under its business model that Netflix, in an unflattering assessment of the company filed in a lawsuit, described as “Buy. Chop up. Sell off. Raise prices. Rinse. Repeat.”
[9]Intel loses another exec as datacenter, AI chief named Nokia CEO
[10]Intel knocked off global chip revenue top spot after rotten 2024
[11]Intel sinks $19B into the red, kills Falcon Shores GPUs, delays Clearwater Forest Xeons
[12]Want Intel in your Surface? That’ll be $400 extra, says Microsoft
The “raise prices” part of that model would not be sensible for Intel’s desktop chips, which are already struggling to compete on features and price with product from AMD and Qualcomm. But the “Chop up. Sell off.” tactics could come into play if Broadcom decides it would rather not contest the drooping PC market.
Intel’s current market capitalization is just over $100 billion, and Broadcom would pay less for its chip design arm alone – perhaps a smaller sum than the $61 billion it paid for VMware.
That deal saw Broadcom [13]cut costs, improve margins and boost profits to a greater extent than it initially thought possible, perhaps giving the company confidence its acquisition methodologies are sufficiently efficient it could swallow Intel. Increasing acquisition costs was a big contributor to that achievement.
[14]
Other speculation about the semiconductor giant’s fate includes the possibility its fabrication business could be sold to a consortium that includes Taiwan’s TSMC. Any sale of Intel’s chip factories would need regulatory approval in many jurisdictions. A deal could prove especially contentious in Washington, where the Trump administration has signalled its displeasure with the CHIPS Act that funnelled billions to Intel and other chipmakers to fund their build of semiconductor fabs in the USA.
Nvidia disarms, a bit
In other semiconductor ownership news, a Valentines Day [15]filing from Nvidia reveals the AI hardware giant sold 44 percent of its shares in chip designer Arm.
Nvidia packs its Grace superchips full of Arm CPUs and is rumoured to be creating an Arm-based PC processor, so selling some shares is not necessarily an indication of displeasure with the UK-based chip design firm. It’s more likely just Nvidia rebalancing its asset portfolio, evidence of which can be seen in the fact the same filing records it sold all its shares in three other companies, and picked up its first stakes in datacenter operator Applied Digital and an outfit called Recursion Pharmaceuticals. ®
Get our [16]Tech Resources
[1] https://www.wsj.com/tech/broadcom-tsmc-eye-possible-intel-deals-that-would-split-storied-chip-maker-966b143b?st=RiRV14&reflink=desktopwebshare_permalink
[2] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Z7MW1zK4FuHbq-6fef5sDgAAAM8&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Z7MW1zK4FuHbq-6fef5sDgAAAM8&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Z7MW1zK4FuHbq-6fef5sDgAAAM8&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[5] https://www.theregister.com/2023/11/23/broadcom_vmware_reorg/
[6] https://www.theregister.com/2018/07/12/broadcom_ca_technologies/
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Z7MW1zK4FuHbq-6fef5sDgAAAM8&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[8] https://www.theregister.com/2022/11/22/intel_reveals_paid_xeon_features/
[9] https://www.theregister.com/2025/02/10/intel_hotard_nokia/
[10] https://www.theregister.com/2025/02/04/intel_chip_revenue_rankings/
[11] https://www.theregister.com/2025/01/31/intel_q4_2024/
[12] https://www.theregister.com/2025/01/30/microsoft_surface_intel/
[13] https://www.theregister.com/2024/12/13/broadcom_q4_fy_2024_vmware/
[14] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/systems&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Z7MW1zK4FuHbq-6fef5sDgAAAM8&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[15] https://d18rn0p25nwr6d.cloudfront.net/CIK-0001045810/6596dc52-7fd9-4774-bf05-1a99a5dd8b6d.pdf
[16] https://whitepapers.theregister.com/
blu3b3rry
It'll be interesting to see how the funding handed over under the CHIPS act is handled if a purchase went ahead. Just about any buyer of Intel is going to chop the Foundry off as soon as possible (and likely let it go bust or be asset stripped). Can't see the US gov getting their money back.....
Even more so if the CHIPS act is as disliked by President Cheese Puff as suggested. I thought he wanted more US manufacturing or something?
Anonymous Coward
... and hence the talk about TSMC taking over the foundry side of the business.
Another bad option
Missing Semicolon
First Qualcomm, now Broadcom?
The value in Intel is the patent portfolio, not the products.
Gee.
sarusa
Looking forward to paying $5000 for an entry level CPU.
(Yeah, I know, their chips are more reasonably priced than their services, but the joke was there. And I am sure they will figure out how to leverage it for evil.)
Re: Gee.
Richard 12
They'll just stop making them.
The duopoly would become ARM vs AMD, all made by a TSMC monopoly.
Bye bye Intel
Will Godfrey
They were rather a curate's egg, but produced some good stuff.
It would fit the pattern
Once great companies, leaders in their field, fallen on hard times due to mismanagement by exec that have long ago ejected with their golden parachutes.
Bought out, massive layoffs, the carcasses squeezed for every drop as long as possible, while their death is drawn out, and customers run for the hills.
Sic transit gloria mundi!