Intel Corp. shares surged by 3.31% to $21.84 during New York trading on Friday, following reports that Qualcomm Inc. had approached Intel regarding a potential takeover. The Wall Street Journal reported that the discussions occurred recently, citing unnamed sources familiar with the matter. However, the Journal also highlighted that the deal is far from certain. Both Intel and Qualcomm representatives declined to comment on the matter. Despite the share price recovery, Intel’s stock is still down 56% this year.
Intel, once the largest chipmaker in the world, has faced significant challenges, including declining sales and rising losses. The company’s market value now stands at around $93.5 billion, nearly half of Qualcomm’s valuation. Should a deal occur, it would mark the largest-ever transaction in the semiconductor industry, with the potential to reshape the market.
While Intel shares rose, Qualcomm’s shares dropped by 2.87%, reflecting investor concerns about the risks involved in such a deal. Qualcomm, based in San Diego, is known as the world’s largest designer of smartphone processors but has been looking to expand into other areas, including chips for personal computers, where Intel maintains dominance.
Qualcomm does not manufacture its own chips and instead relies on partners like Taiwan Semiconductor Manufacturing Co. (TSMC), which also makes chips for companies like Nvidia and Advanced Micro Devices (AMD). Acquiring Intel could give Qualcomm control over its own production facilities in the U.S. and access to Intel’s strong brand in the PC and traditional server markets.
However, acquiring Intel may not solve all of its issues. Qualcomm lacks experience in managing chip manufacturing or advancing the science behind cutting-edge production technology, a field where TSMC excels. This gap could present significant challenges in making the acquisition work.
This isn’t Qualcomm’s first time involved in a major takeover scenario. More than six years ago, Broadcom Inc. attempted to acquire Qualcomm, but the deal was blocked by then-President Donald Trump, citing national security concerns.
Intel has been actively working to get its business back on track. This week, the company announced a series of major changes, including a multibillion-dollar deal with Amazon to create a custom AI semiconductor and a plan to restructure its manufacturing business into a wholly owned subsidiary.
If Qualcomm succeeds in acquiring Intel, the deal could redefine the semiconductor landscape, but many hurdles remain before any such transaction is finalized.
This takeover report comes at a time when the semiconductor industry is witnessing rapid consolidation and innovation, driven by demand for advanced chips in areas such as artificial intelligence, 5G, and cloud computing.
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