Qualcomm struck a deal with an activist shareholder and agreed to cut $1.4 billion in costs, slash up to 15 percent of its workforce, change some of its corporate practices and review whether to split up its chipset and licensing units. The announcement, which came as the silicon giant reported disappointing earnings, was largely in line with the demands that the investor, hedge fund Jana Partners, had spelled out in mid-April.
Qualcomm plans to announce thousands of job cuts this week as the chipset giant faces declining prices for smartphones and rising competition from Chinese vendors, according to a report from The Information.
Intel is still on track to cut around $800 million from losses in its mobile operations this year but is delaying slightly the introduction of its newest mobile chips designed for entry-level devices.
Qualcomm has been the leader in the LTE baseband chipset market, and it still is, but it now has a clear strong competitor in the form of MediaTek, according to a new report from research firm Strategy Analytics.
Qualcomm Executive Chairman Paul Jacobs said the wireless silicon giant has no current plans to spin off its chipset business from its licensing business despite pressure from an activist investor to do so.
Intel said it will invest $125 million in startups run by women and minorities. The new fund will be run by Intel Capital and some of that amount will overlap with the previously announced $300 million the company has promised to spend on diversifying its workforce.
It seems that every month this year has brought news of some M&A activity in the chipset industry. However, the big deals ahead for semiconductor companies could be even more focused on the Internet of Things.
Google and Infineon Technologies are developing a chipset small enough to be put into wearable devices that can sense hand gestures and movements via radar.
Intel agreed to buy rival chipset maker Altera for $16.7 billion in a long-rumored deal that will get Intel further involved in the market of silicon for network gear and data centers. The deal represents another indication of consolidation in the silicon industry and comes hot on the heels of Avago Technologies' $37 billion transaction to buy Broadcom, which will push Avago into the networking chipset market.
Avago Technologies confirmed it will buy rival Broadcom for $37 billion, in a further consolidation of the chipset industry. Avago said it will use the deal to get further involved in the wireless infrastructure, networking and broadband technology markets.