Reports circulated over the weekend that semiconductor giant Qualcomm was interested in acquiring another semiconductor giant, Intel. Both companies have so far remained quiet about what’s going on.
Intel was founded in 1968 and has since become a huge name in both Silicon Valley and the consumer world. You may have seen an Intel sticker on one of the computers that has an Intel chip inside.
The chip at the heart of Intel’s success is called a central processing unit, and Intel released the first version of it in 1971, according to David Rose, curator of semiconductors at the Computer History Museum in Mountain View, California.
“They became popular as basic, simple controllers for everything from traffic lights to machines that milk cows,” he says, “and eventually became the central processors for major computers.”
Think of the CPU as the brains of your computer, and Intel’s customers include PC makers and companies that use large data centers, says Angelo Gino, a technology equity analyst at CFRA Research.
“For many years, they have been recognized as the most important components of the device,” he said.
But now more companies want to build artificial intelligence capabilities into their devices, and to do that they need another kind of chip called a graphics processing unit, or accelerator, Zino said.
“Accelerators are exactly what they sound like: they help ‘speed up’ the computing power of a device,” he said.
This is a computer brain that’s had a lot of coffee.
Intel doesn’t specialize in making GPUs, Gino said, and “they continue to lag behind in that area.”
In addition to missing the transition to AI, Gino said Intel has also lost market share in its flagship product, CPUs.
So now Intel is focusing on manufacturing, with plans to make chips for other companies as well as its own designs, said Kunjan Sobhani, an analyst at Bloomberg Intelligence.
“That would open up a huge new market for them,” he said.
Sobhani noted that Intel has also received billions of dollars in CHIPS Act funding to help it manufacture chips in factories called foundries in the United States.
“They can build CPUs for their customers. They can build GPUs,” he said. “So they don’t have to be limited to a particular type of chip.”
But building these factories requires a lot of liquidity, and as Intel struggles to do that, it has become a potential takeover target, Sobhani said.
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