Qualcomm has reportedly approached its rival Intel about the possibility of acquisition.
As of now, Qualcomm has not made an official offer for Intel.
Given the crucial role both companies play in national security, a merger would likely attract significant regulatory scrutiny.
If you’re familiar with tech giants, you’ve probably heard of Qualcomm and Intel—two of the biggest names in the semiconductor industry. Qualcomm has reportedly approached its long-time competitor, Intel, about the possibility of acquisition. This news comes as a surprise, especially given the vast size and importance of both companies in the world of technology.
As of now, Qualcomm has not made an official offer for Intel, and significant challenges stand in the way of any potential deal. Given the massive size and the crucial role both companies play in national security, a merger would likely attract significant regulatory scrutiny.
It’s uncertain whether regulators would allow Qualcomm to proceed with the acquisition without including Intel’s struggling foundry business, according to a report by The New York Times. Additionally, it remains unclear whether Qualcomm would be willing to take on such a complicated and costly part of Intel’s operations.
Also read: CERT-In issues security warning for smartphones running on Mediatek and Qualcomm chips: Details here
Chip-maker Intel has seen its market position weaken over the years due to management issues and missed technological shifts. The company’s failure to capitalise on the mobile phone chip market and the boom in artificial intelligence (AI) has allowed competitors like Nvidia to take the lead in areas like AI chip development. Intel’s manufacturing capabilities, once state-of-the-art, have also fallen behind companies like Taiwan Semiconductor Manufacturing Company (TSMC).
Earlier in August, Intel reported a $1.6 billion quarterly loss and announced plans to cut 15,000 jobs. The company also recently paused the setup of new plants in Germany and Poland.
The potential deal would come with a hefty price tag. Intel, whose shares have dropped by nearly 40% over the past year, holds a market value of $93 billion. In contrast, Qualcomm, which has seen its shares rise 55%, has a market value of $169 billion.
Patrick Little, a former Qualcomm executive and current CEO of Silicon Valley start-up SiFive, highlighted that Qualcomm might be more interested in Intel’s chip design operations and its expertise in PC software, rather than taking on the costly foundry business. “Those are things Qualcomm would have to mature on their own over time,” he said. “If they worked with or somehow had a piece of Intel, that could accelerate that part of their strategy.”
This potential deal would face a tough antitrust review and national security concerns, given Intel’s critical role in defence and the overall US competitiveness in semiconductors, according to the report.
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Ayushi Jain
Tech news writer by day, BGMI player by night. Combining my passion for tech and gaming to bring you the latest in both worlds. View Full Profile
