Report: Qualcomm recently expressed interest in acquiring Intel

Qualcomm Inc. has approached Intel Corp. about a potential takeover, Wall Street Journal reported Today.

The mobile chip designer is believed to have floated the idea in recent days. Journal sources warned that a deal was “far from certain,” but the report nonetheless sent Intel shares higher before the close of trading. The company’s stock price was up 8% at one point and ended the trading session 3.31% higher.

The timing of Qualcomm’s acquisition could be influenced by Intel’s disappointing earnings report last month. The weaker-than-expected results sent the company’s shares down more than 25%, lowering the asking price for a potential buyer. Intel was already trading well below its five-year high before the earnings report.

Even with the chipmaker’s recent stock price plunge, the Qualcomm acquisition still could be one of the largest in tech history. Intel has a market capitalization of more than $93 million. The chipmaker generated $54.2 billion in revenue in fiscal 2023, about $18 billion more than Qualcomm.

Today’s report suggests Qualcomm could sell some Intel units as part of the deal. One likely candidate for the spin-off is Intel’s foundry, which makes chips designed by other companies. Earlier this month, the unit began shifting to a new organizational structure, which would significantly facilitate a possible separation of the company.

Selling off Intel’s foundry business could help lower Qualcomm’s acquisition price. It would also allow the company to avoid entering a complex market in which it has limited experience. Qualcomm is a fabless chip supplier that designs processors but doesn’t manufacture them, meaning taking over Intel’s foundry manufacturing operations could prove challenging.

Any acquisition the companies might make would likely be subject to antitrust scrutiny. For Qualcomm, limiting the scope of the deal to a subset of Intel’s businesses would have the added benefit of reducing regulatory pressure.

Today’s report comes weeks after sources reported that Reuters Agency that Qualcomm wants to buy parts of Intel’s chip design group. The company is particularly interested in acquiring the unit that designs chips for personal computers, according to sources. Intel recently made his debut a new series of laptop processors, Arrow Lake, which is significantly more energy efficient than competing Qualcomm processors.

Photo: Intel