It was unclear whether Intel had negotiated with Qualcomm or what the terms would be, according to a person familiar with the matter who requested anonymity because the information was confidential.
The Wall Street Journal first reported on the matter. Shares of Intel initially popped before falling near their closing price on Friday.
The deal, if it happens, would be one of the biggest technology mergers ever. Intel has a market cap of over $90 billion.
Once the world’s largest chipmaker, Intel has been on a downward spiral for several years with an upturn in 2024. The stock suffered its biggest one-day drop in 50 years in August after the company reported disappointing earnings. Shares of Intel are down 53% this year as investors express skepticism about the company’s expensive plans to manufacture and design chips.
Qualcomm and Intel compete in several markets, including PC and laptop chips. However, Qualcomm, unlike Intel, does not manufacture its own chips, and instead relies on firms such as Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung to handle production.
On Monday, after a board meeting to discuss strategy, Intel CEO Patrick Gelsinger sent a memo to staff reiterating the company’s commitment to investing heavily in its foundry business, a A project that could cost $100 billion over the next five years. It also said it was weighing external investment.
Intel has also missed the artificial intelligence boom that has captured Wall Street’s attention. Most modern AI programs, such as ChatGPT, run on Nvidia graphics processors rather than Intel CPUs. According to analysts, Nvidia has more than 80% of the fast-growing market.
Qualcomm generates less revenue than Intel. It reported sales of $35.8 billion in fiscal 2023, compared to Intel’s $54.2 billion during that period.
A potential deal would be complicated by issues of mistrust and national security. Both Intel and Qualcomm do business in China, and both have seen deals from Chinese antitrust enforcers in the past. Intel failed in its attempt to acquire Tower Semiconductor, as did Qualcomm’s attempt to acquire NXP Semiconductor.
Broadcom made a bid to buy Qualcomm for more than $100 billion. The Trump administration blocked the deal the following year over national security concerns, as Broadcom was then based in Singapore. And in 2021, the FTC sued to block an attempt to buy Nvidia’s arm on antitrust grounds. The deal was canceled in 2022 after additional pressure from regulators in Europe and Asia.
Qualcomm and Intel: Possible Merger in the Works?
Recently, Qualcomm reached out to Intel about a possible takeover, sparking interest in the tech world. Although it’s not clear if Intel is ready to negotiate or what the terms might be, this news has caught everyone’s attention. According to The Wall Street Journal, shares of Intel rose initially but then fell back to near their closing price.
If this deal goes through, it could be one of the biggest technology mergers ever, given that Intel is valued at over $90 billion. Once the leading chipmaker, Intel has faced challenges in recent years, including a significant drop in its stock price after disappointing earnings reports. So far this year, Intel’s shares have decreased by 53%, raising concerns among investors.
While Qualcomm competes with Intel in various markets, it relies on other companies to produce its chips, unlike Intel, which manufactures its own. This merger could bring about changes in how these companies operate, especially with the rise of artificial intelligence, where Nvidia currently dominates the market.
However, potential challenges lie ahead. Both companies have faced scrutiny over national security and past failed acquisitions. If they do proceed with a deal, it will be essential to navigate these complex issues carefully.
