Intel declines Arm Holdings’ bid for chip division amid financial turmoil

Arm Holdings recently inquired about purchasing Intel Corp.’s product division, which focuses on chips for personal computers and servers. However, Intel informed Arm that the division is not for sale, as confirmed by a source familiar with the discussions. This comes amid ongoing struggles for Intel, which has seen a significant decline in its business, prompting speculation about potential acquisitions and significant layoffs.

Intel is grappling with significant financial difficulties, highlighted by a disappointing earnings report that led to a notable decline in its stock price. In reaction, the company plans to lay off 15,000 employees and reduce its factory expansion initiatives while exploring a potential restructuring that could result in a division of its operations. Meanwhile, Arm, traditionally recognised for its smartphone chip designs, aims to broaden its presence in the personal computer and server markets to strengthen its competitive position against Intel.

With a valuation surpassing $156 billion, Arm is viewed as a beneficiary of the growing AI sector and has the financial backing of Japan’s SoftBank. In contrast, Intel’s market capitalisation has fallen to approximately $102.3 billion this year. Meanwhile, the company is exploring other investment opportunities, including a $5 billion offer from Apollo Global Management and plans to divest part of its stake in Altera Corp., further indicating its intent to stabilise and restructure its operations.