Qualcomm (QCOM) is possibly evaluating Intel Foundry (INTC) for its data center ASIC business, according to Qualcomm job postings analyzed by Citi Research.
The job postings were looking for candidates with qualifications in Intel’s Embedded Multi-Die Interconnect Bridge packaging technology. Citi also noted similar job postings from Apple (AAPL) and Broadcom (AVGO). Citi analysts said these companies could be attempting to find ways to use Intel Foundry in order to line up with the U.S. CHIPS and Science Act, which was created to increase domestic semiconductor manufacturing.
“We would note all three of these potential engagements, if they were to pass, would be for packaging, which carries low pricing and margins, not front-end foundry,” said Citi analysts, led by Christopher Danely, in a Wednesday investor note. “We also doubt any of these efforts will amount to anything material for Intel, given it is so far behind TSMC (TSM).”
What’s more, data center ASICs account for less than 1% of Intel sales, meaning even if these deals did occur, it would not “be a material revenue driver for Intel Foundry,” Danely added.
Citi maintained its Neutral rating on Qualcomm and a Sell rating on Intel.