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Intel Corporation (Nasdaq: INTC) faces a series of challenges as it navigates a turbulent market landscape, with significant layoffs, cybersecurity scrutiny, and potential acquisition talks dominating recent headlines. The semiconductor giant’s stock performance reflects these headwinds, trading at $22.16 as of 11:31 AM EDT on Wednesday, down 2.23% for the day and significantly underperforming the broader market over various timeframes.

Intel Plans to Cut Over 1,000 Jobs at its Hillsboro Campus

In a move that marks one of the largest layoffs in Oregon state history, Intel plans to cut 1,300 jobs at its Hillsboro campus in November 2024.

This decision follows a staggering loss exceeding $1 billion reported in August, prompting the company to target $10 billion in expense reductions for the coming year. The Hillsboro facility, Intel’s largest and most advanced site globally with over 20,000 employees, finds itself at the center of the company’s turnaround efforts. Intel’s struggle to maintain its position as a technology leader against rivals like AMD, Nvidia, and TSMC is evident in its revenue decline of nearly a third since 2021.

Adding to Intel’s woes, the company faces intensified cybersecurity scrutiny in China, coinciding with disappointing earnings results that fell short of Wall Street expectations.

In response to these challenges, Intel has announced plans to reduce its workforce by over 15% as part of a comprehensive $10 billion cost-cutting strategy. These moves come as the company grapples with a rapidly evolving semiconductor landscape and increased competition in key markets.

Potential Acquisition by Qualcomm Hinges on Election Results

Amidst Intel’s struggles, reports suggest that Qualcomm is considering a potential acquisition of the chipmaker. However, sources indicate that Qualcomm will likely wait until November after the U.S. presidential election before making any definitive moves.

The delay is attributed to the need for clarity on how the new administration might impact the antitrust landscape and U.S.-China relations, both critical factors in any potential deal.

Qualcomm has already made preliminary approaches to Intel regarding a possible takeover in September and has initiated informal inquiries with Chinese antitrust regulators to gauge their stance on a potential deal.

The proposed combination of these two semiconductor giants would undoubtedly face intense regulatory scrutiny worldwide. Intel’s crucial role in the U.S. government’s plans for a domestic chipmaking renaissance adds another layer of complexity, making political backing essential for any deal to progress.

Despite these challenges, Qualcomm (Nasdaq: QCOM) reportedly believes that an all-American combination could help alleviate some regulatory concerns.

As Intel navigates these turbulent waters, its stock performance continues to lag behind the broader market. With a year-to-date return of -55.32% compared to the S&P 500’s +22.11% and similarly poor performance over 1-year, 3-year, and 5-year periods, investors remain cautious.

The company’s next earnings report, scheduled for October 26, 2024, will be closely watched for signs of a potential turnaround amidst these significant challenges and strategic shifts in the semiconductor industry.

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