Qualcomm Approaches Intel For A Possible Takeover

Amid Intel going through its worst phase, Qualcomm has made a bid to acquire Intel, reports The Wall Street Journal. The report quotes people who are familiar with the matter and said the deal is “far from certain.” On the other side, The New York Times also confirmed that Qualcomm approached Intel in recent days for a potential takeover, but there has been no official offer yet.

According to the NYT, Qualcomm and Intel spokesperson declined to comment on the current development. Recently, Intel’s market value collapsed to $93 billion with a drop of 60% in share value. In contrast, Qualcomm’s market cap has ballooned to $18 trillion, making its place among the world’s 100 most valuable companies.

After the AI boom, Intel has struggled with its foundry business. The company has not been able to transition to smaller process nodes while TSMC has been surging ahead with state-of-the-art lithography processes. Not to mention, Nvidia has become the most valuable company in the world, thanks to the Generative AI boom, so in the server space too, Intel has lost many customers. Intel’s Gaudi AI accelerator has failed to take off.

All that said, the deal between Intel and Qualcomm is unlikely to materialize as it would attract regulators’ scrutiny from around the world. Recently, under the CHIPS Act, Intel was awarded $8.5 billion in grants from the US govt to build new chip plants.

The US govt is aiming to support domestic chip companies to boost semiconductor manufacturing and maintain a reliable supply chain inside the country. Not to mention, amid geopolitical tensions, having a domestic chip company would help the US sustain technological independence.

Besides all the doom and gloom, Intel’s client-side business seems poised to take on Qualcomm’s ARM-based Snapdragon X series processors. The new x86-based Intel Lunar Lake chipsets look promising, and with recent reports indicating that Snapdragon X Elite underperformed in the market, it seems Intel may regain some ground, after all.