Is Intel wasting money in buyouts ?
Intel is the world’s largest producer of computer chips and almost 80% of the computers in the world carry Intel chips only. And the company now sees stagnation or slow growth in the computer / laptop chip sales and hence wants to expand into mobile chip sales domain.
So it has got into the task of buying out Infineon for 1.4 billion dollars and has also gobbled up McAfee for 7.7 billion dollars. These buyouts are expected to help the company in moving faster into the mobile chip market. The move could boomerang on the company if it is not able to get the kind of volume growth in the mobile chips market, or even if the realizations are not healthier.
Coupled with that the company may not be able to buy any company in the near future at a lucrative rate, if and when the recession sets in. So it looks to be a kind of a gamble by Intel in spending nearly nine billion valuable dollars in buying these two companies. The company seems to be on the lookout for more companies in the mobile tech arena.