Qualcomm approached Intel about acquisition, report claims
The Wall Street Journal reports a deal was discussed, but is "far from certain."
Qualcomm has its eye on Intel. According to a report from the Wall Street Journal, Qualcomm approached the struggling Intel about a potential takeover deal. The deal is described as "far from certain" and likely to garner antitrust investigations. If a deal occurred, it could also have far-reaching effects on the x86 architecture.
It's possible that Qualcomm could only be interested in portions of Intel, or, the WSJ suggests, could sell portions of the company in order to get a deal through.
Intel has been in crisis mode since it reported a $1.6 billion loss due to struggling data center and foundry divisions (though many parts of the company are still profitable). Putting Intel Foundry Services in a position to make chips for other companies has been a cornerstone idea for CEO Pat Gelsinger's tenure (the other being to move through five nodes in four years to catch up on the design side and catch up to TSMC, which Intel has outsourced some manufacturing to.)
Intel declined to comment to Tom's Hardware. Qualcomm has yet to respond to a request for comment.
The company announced that it would lay off more than 15% of its employees, suspend its dividend to investors, spin its foundry business into an independent subsidiary, pause fab projects in Germany and Poland, and put a stop to any non-essential work. The company has also had some PR disasters with instability issues with its 13th and 14th Gen Core desktop processors while running games (Intel since extended warranties and issued microcode updates to alleviate the problem.
In August, Lip-Bu Tan left Intel's board after two years of service, creating a huge gap in technical knowledge on the board. Intel is also working with Morgan Stanley in an attempt to prepare for potential challenges from activist investors, clearly anticipating challenges.
Intel has been key to the U.S. government's plans to strengthen the domestic chip business, with the company awarded $8.5 billion in funding to boost manufacturing on top of reports that it will bring in another $3.5 billion to make chips for the Pentagon as part of the Secure Enclave program. It's unclear how these deals could be affected by a takeover.
Additionally, Intel and AMD have cross-licensed their respective x86 IP. In the event of an acquisition, it's possible one or both of the companies could lose access to key portions of the platform. This would surely be a significant point of any negotiation in an attempt to take over Intel.
In the PC world, Qualcomm is finally competing in the laptop market with the launch of its Snapdragon X processors. These have been received far better than previous Windows on Arm CPUs by the press, and Microsoft made them the first to qualify as Copilot+ PCs. Qualcomm is challenging Intel in terms of efficiency and battery life ahead of the launch of Lunar Lake. Most of Qualcomm's work, however, is in mobile phones, as well as in cellular towers and communications.
In recent years, Intel has also seen increased competition from AMD on the client PC side and from Nvidia, which has effectively taken over the AI space.
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Andrew E. Freedman is a senior editor at Tom's Hardware focusing on laptops, desktops and gaming. He also keeps up with the latest news. A lover of all things gaming and tech, his previous work has shown up in Tom's Guide, Laptop Mag, Kotaku, PCMag and Complex, among others. Follow him on Threads @FreedmanAE and Mastodon @FreedmanAE.mastodon.social.
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Dustyboy1492 Go home Qualcomm you're drunk. Qaulcomm 38 billion in revenue, Intel 58 billion. Maybe Intel will buy you? Even if all the stars aligned this would never pass the anti-trust case in the US or China. Just trolling for Qualcomm.Reply -
why_wolf "Additionally, Intel and AMD have cross-licensed their respective x86 IP. In the event of an acquisition, it's possible one or both of the companies could lose access to key portions of the platform. This would surely be a significant point of any negotiation in an attempt to take over Intel."Reply
Qualcomm wants that chaos. If it can hamstring AMD with patent "negotiations" they could then push their ARM CPUs with no competition in the PC space.
Money wise this is a crazy poison pill kind of deal that would saddle the new company with so much debt it could never escape. -
ThomasKinsley It's clear Qualcomm wants to lead the desktop market. What's not clear is if Intel is willing to hand over the x86 license.Reply -
baboma For those wanting to read the original WSJ piece, which is by far preferable to the THW rehash, then use the tech aggregator Techmeme.com and click on the WSJ link from there. Techmeme apparently has an agreement w/ WSJ to allow click-thru with full content.Reply
Anyway, this rumor falls into the wishful whimsy category. Given the recent chips-n-fabs arms race between US and China Intel is too critical a company to be allowed to fail, or be acquired/merged with any other company. Its importance and vast marketshare in the tech markets (in addition to Qualcomm's in mobile) would also nix any deal from the market consolidation standpoint. Read it for entertainment. -
Amdlova That's just a dream... The American gov will give to intel the market of 1 Tri "The war machine". Fabs on other countries will be canceled one by one. They will focus only on American market.Reply -
JamesJones44
Market cap is the more important metric when looking at public company acquisitions. Intel's market cap is 90 Billion vs Qualcomm's 193 Billion. Qualcomm could do it with a small amount of cash and a 0.50 QComm shares per Intel share for example which would create a 283 billion dollar company roughly. Share delusion and other things would come into play, but these types of acquisitions have happened in the past. I found a link that does a nice job of explaining stock deals. However, it doesn't need to be one or the other, companies can do a mix of stock and cash to acquire company.Dustyboy1492 said:Go home Qualcomm you're drunk. Qaulcomm 38 billion in revenue, Intel 58 billion. Maybe Intel will buy you? Even if all the stars aligned this would never pass the anti-trust case in the US or China. Just trolling for Qualcomm.
https://www.moneyland.ch/en/all-stock-deal-definition#:~:text=The%20terms%20all%2Dstock%20deal,as%20payment%2C%20rather%20than%20cash. -
JamesJones44
To critical to fail I agree with. However, a shotgun wedding to save the company would not be out of the question or norm. Remember the US government did this with Chrysler and Fait back in 2008. In this case it would be a shotgun wedding with two US companies, it might just go through, but I agree it's a long shot.baboma said:Given the recent chips-n-fabs arms race between US and China Intel is too critical a company to be allowed to fail, or be acquired/merged with any other company. Its importance and vast marketshare in the tech markets (in addition to Qualcomm's in mobile) would also nix any deal from the market consolidation standpoint. Read it for entertainment -
Kamen Rider Blade You know what would be hilarious, if Qualcomm & nVIDIA was able to buy a x86 License from Intel & AMD to compete directly on x86 CPU's.Reply
That would be a very interesting turn of events. -
baboma >However, a shotgun wedding to save the company would not be out of the question or norm.Reply
I haven't read of any indication--from reputable business rags, not clickbait blogs--that Intel is a failing company. Cash crunch, yes, imminent bankruptcy, no.
Its major cash drain is the build-outs for its fabs--that and bloated payroll, and complacency/turgidity that comes from being a long-time incumbent (eg Google). Chopping payroll and delaying builds are all prudent actions to address those. The rest hopefully would come from restructuring, incentivized by investor ire and lawsuits (raises hand).
Intel's upcoming consumer products (LNL & ARL) have had positive news and reception, and future product plans per leaks look to be strong. Admittedly, I don't follow the data center & AI arena, which are more important than the consumer side from the financial standpoint.
>US government did this with Chrysler and Fait back in 2008
Chrysler and Fiat are relative small fries. Both Intel and Qualcomm are dominant players in their respective markets, and their merging would create a super-monopoly. Given the aggressive anti-trust actions and current antipathy against Big Tech, this notion is DOA. I'm surprised that WSJ even reported it.
OTOH, Intel stocks did get a bump from the rumor, so it's all good.