Could Intel’s Modem Business Appeal to Samsung?

Complicated picture for Intel

Intel (INTC) is seeking a buyer for its modem chips business, according to a Wall Street Journal report. Last month, Intel announced that it will exit the modem chips market to focus on businesses where it has higher chances of success. The announcement came shortly after Qualcomm (QCOM) and Apple settled their long-running legal dispute. The companies completed several business deals. Apple agreed to purchase modem chips for its iPhones from Qualcomm.

Apple returning to Qualcomm chips was viewed as a blow to Intel’s modem business. Intel lost a key customer for its mobile modem chips.

Could Intel’s Modem Business Appeal to Samsung?

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Expanding the chip business

Intel’s search for a buyer for its modem business comes at a time when Samsung (SSNLF) is looking to significantly expand its chip business. Samsung plans to invest $116 billion to expand and diversify its chip business over the next decade, according to a Reuters report last month. The modem chips business could be an appealing area for Samsung if it wants to shake Qualcomm’s hold in this market and boost its semiconductor prospects in the 5G era.

Recently, the semiconductor industry has seen many deals. Some chipmakers want a better position to capitalize on the anticipated strong demand for chips that power 5G devices, self-driving vehicles, and Internet-of-Things objects.

Intel’s revenue growth

Intel generated revenues of $16.1 billion in the first quarter—flat from a year ago. Advanced Micro Devices’ (AMD) revenues fell 23% YoY (year-over-year). However, Broadcom’s (AVGO) revenues rose 9.0% YoY in the first quarter.