In a shocking turn of events in the semiconductor industry, Qualcomm has, as reported in the New York Times, approached Intel to discuss the possibility of acquiring chip giant Intel. This move comes as Intel struggles with declining market share and technological setbacks, while Qualcomm rides high on the boom in mobile and AI chips.
Qualcomm has not made an official offer yet, but has initiated exploratory talks. The deal faces significant hurdles, including regulatory scrutiny due to the companies’ size and importance to national security.
A decade ago, such a move would have been unthinkable, highlighting Intel’s recent struggles in mobile and AI markets. Intel’s market cap is around $93 billion, down 40% over the last year, while Qualcomm’s is $169 billion, up 55%.
One twist to any deal, Qualcomm doesn’t actually manufacture its chips and it may be more interested in Intel’s chip design operations and PC expertise rather than its manufacturing facilities. But Intel’s recent division of the company into design and manufacturing may make this type of deal even more possible.
Any potential deal would face intense antitrust review and national security scrutiny, given Intel’s importance in defense applications and U.S. semiconductor competitiveness.
While it’s at the discussion and rumours stage, this could reshape the landscape of the semiconductor industry, with far-reaching implications for technology, national security, and global competition in chip manufacturing.
