A potential acquisition of Intel by Qualcomm could fast-track the smartphone chipmaker’s diversification strategy but would burden it with Intel’s loss-making semiconductor manufacturing division, according to industry analysts. This deal would also likely face intense antitrust scrutiny, as it would merge two key players in the semiconductor industry, creating a massive entity with a significant presence in the smartphone, personal computer, and server markets.
Intel’s stock (INTC.O) saw nearly a 3% rise on Monday following reports of Qualcomm’s early-stage approach to acquiring the struggling chip giant. Meanwhile, Qualcomm’s shares (QCOM.O) fell by 1.8%.
“The rumored deal between Qualcomm and Intel is intriguing from a product perspective as their offerings are complementary,” said Bob O’Donnell, founder of TECHnalysis Research. “However, the likelihood of it actually happening is very low. Qualcomm probably wouldn’t want all of Intel, and separating Intel’s product business from its foundry division at this time seems unfeasible.”
Intel, once a dominant player in the semiconductor industry, has been experiencing one of its most challenging periods in decades. Losses are mounting in its contract manufacturing unit, which Intel is attempting to expand to compete with Taiwan Semiconductor Manufacturing Company (TSMC). Intel’s market value has plummeted below $100 billion for the first time in 30 years, as it failed to capitalize on the generative AI boom after missing out on an opportunity to invest in OpenAI.
In contrast, Qualcomm’s market value sits at approximately $190 billion, more than double Intel’s current capitalization. Analysts predict that Qualcomm would largely finance the acquisition through stock, which could lead to dilution concerns among Qualcomm’s investors.
While the deal, if realized, could potentially position Qualcomm as a major player across multiple tech sectors, it also presents significant challenges—both operational and regulatory.
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