Goodbye Intel Qualcomm is close to acquiring it
If Qualcomm pulls it off, its acquisition of Intel would likely be the biggest in Silicon Valley history. While you have good reasons to pursue the legendary chip giant, there are plenty of reasons why it might not happen.
The possibility that Intel could cede its 56-year history to a younger rival emerged last week after several reports revealed that California semiconductor company Qualcomm had approached it to negotiate a takeover.
Qualcomm is no newcomer to Silicon Valley. It was founded in 1985, 39 years ago. Since then, it has grown into a company valued at more than $188 billion, specializing in areas such as wireless networking, smartphone processors, and modems.
But recent troubles at Intel, a longtime chip designer and manufacturer, appear to have given Qualcomm reason to consider acquiring a company that has lost more than half its value this year and has seen its market cap fall to just over $93 billion.
While some of its major competitors, like Nvidia, have reached new heights as a result of the rise of generative AI, Intel has struggled to capitalize on investor interest in the technology. It has also faced problems with production and strategy.
The company suffered a serious collapse in August — a month in which it lost nearly $30 billion in market value — after announcing the layoff of 15,000 employees and the suspension of its dividend starting in the fourth quarter of this year.
Qualcomm’s talks with Intel to end the acquisition are still at an early and very exploratory stage. A person close to Qualcomm told the Financial Times that the company is “only interested in reaching an amicable agreement.”
Qualcomm's financial power is much greater than Intel's, however, and it would have to launch a series of internal moves to complete the acquisition. The Wall Street Journal suggests that it could sell part of its assets. The point is that Qualcomm could also get rid of parts of Intel if a deal is reached. But we don't know which divisions would be affected in this case.