Qualcomm recently approached the struggling chipmaker Intel regarding a potential takeover, CNBC has confirmed. The details of the engagement, including whether Intel has entertained discussions or what the specific terms might be, remain unclear according to a source familiar with the matter who requested anonymity due to the confidential nature of the information.
The Wall Street Journal initially reported on the potential deal. Following the news, Intel’s stock price increased before closing up approximately 3%, while Qualcomm’s shares decreased by about 3% at the close.
If the acquisition were to proceed, it would represent one of the largest mergers in the technology sector. Intel, which once held the title of the world’s largest chipmaker, currently has a market capitalization exceeding $90 billion. However, Intel has experienced a significant decline over recent years, a trend that accelerated in 2024. The company’s stock suffered its largest single-day drop in over 50 years this past August after reporting disappointing earnings, resulting in a 53% decrease in share value this year as investors question Intel’s high-cost strategy to design and manufacture its own chips.
Intel and Qualcomm are competitors in several markets, including PC and laptop chips. Unlike Intel, Qualcomm does not manufacture its own chips but relies on external firms such as Taiwan Semiconductor Manufacturing Company and Samsung to manage production.
Recently, Intel CEO Patrick Gelsinger, after a strategy-focused board meeting, issued a memo reiterating Intel’s commitment to investing heavily in its foundry business, a venture that could require $100 billion over the next five years. The memo also noted that the company is considering external investments.
Intel has notably been absent from the artificial intelligence (AI) boom, which has captured significant Wall Street interest. Most advanced AI programs, including ChatGPT, operate on Nvidia graphics processors rather than Intel’s central processors. Analysts estimate Nvidia controls more than 80% of this rapidly expanding market.
In terms of revenue, Qualcomm lags behind Intel, reporting $35.8 billion in sales for fiscal 2023 compared to Intel’s $54.2 billion within the same period.
A potential deal between the firms could face complications related to antitrust and national security concerns. Both Intel and Qualcomm conduct business in China and have encountered opposition from Chinese antitrust regulators in previous acquisition attempts. Notably, Intel’s bid to acquire Tower Semiconductor and Qualcomm’s attempt to acquire NXP Semiconductor were both thwarted.
Other large-scale acquisitions in the sector have also faced significant hurdles. In 2017, Broadcom’s offer to purchase Qualcomm for over $100 billion was blocked by the Trump administration in 2018 on national security grounds, as Broadcom was based in Singapore at the time. Additionally, the Federal Trade Commission sued to block Nvidia’s $40 billion acquisition of Arm in 2021 on antitrust grounds, leading to the deal being called off in 2022 after further regulatory pressure from Europe and Asia.
Representatives from Qualcomm and Intel declined to comment on the matter.
