Qualcomm Considers Intel Acquisition – Analysts Provide Insights

Qualcomm has reportedly begun discussions with Intel regarding a possible acquisition, a move that could significantly impact the semiconductor industry but may encounter substantial obstacles.

CEO Cristiano Amon is said to be personally overseeing these negotiations as he explores various strategies for Qualcomm. Earlier reports indicated that the company was considering acquiring parts of Intel’s design business, particularly its PC design division. Qualcomm executives are reportedly examining Intel’s entire portfolio in this context.

Currently, the discussions are in the preliminary stages, and Qualcomm has not yet made a formal offer for Intel.

This initiative comes at a challenging time for Intel, which, after being the leading chipmaker globally, has seen its stock price drop over 56% since the beginning of the year.

If a deal were to materialize, it would likely attract considerable scrutiny from antitrust regulators in the U.S., China, and Europe, potentially forcing Qualcomm to divest some of Intel’s assets to gain approval.

Should the acquisition go through, it would mark the largest takeover attempt in the tech sector since the 2018 bid by Broadcom for Qualcomm, which was halted due to national security concerns under President Trump.

Analyst Perspectives on the Qualcomm-Intel Discussions

Stifel: The firm expresses skepticism about the likelihood of regulatory approval due to the complexities of similar mega-deals in the past. They suggest that an announcement of a deal could lead to a lengthy review process, potentially benefiting competitors like AMD in the PC and data center server markets.

Bernstein: Analysts at Bernstein indicate concerns regarding the financial implications of such a deal, suggesting significant dilution for Qualcomm if it includes Intel’s manufacturing facilities. They advise against pursuing the acquisition due to the associated risks and uncertain returns.

JPMorgan: They believe that some segments of Intel would align well with Qualcomm’s strategy, particularly in areas like PCs and data center servers.

Mizuho: They note that while the acquisition could provide valuable diversification for Qualcomm, the financial structure could require substantial funding. They also highlight potential challenges from the FTC and pushback from other semiconductor firms, as well as Intel’s focus on advancing its semiconductor manufacturing capabilities.

Overall, the potential acquisition of Intel by Qualcomm raises both opportunities and significant hurdles within the ever-evolving landscape of the semiconductor industry.