Report: Qualcomm recently expressed interest in acquiring Intel

Qualcomm Inc. has approached Intel Corp. a few potential acquisition, the Wall Road Journal reported at this time.

It’s believed that the cellular chip designer floated the concept in latest days. The Journal’s sources cautioned {that a} deal is “removed from sure,” however the report nonetheless despatched Intel shares climbing earlier than the closing bell. The corporate’s inventory worth jumped as a lot as 8% at one level and ended the buying and selling session 3.3% increased. 

The timing of Qualcomm’s takeover push could be influenced by the disappointing earnings report that Intel posted final month. The lower-than-expected outcomes despatched the latter firm’s inventory plummeting greater than 25%, decreasing the worth a possible acquirer must pay. Intel was already buying and selling properly under its five-year peak earlier than the earnings report. 

Even with the latest decline within the chipmaker’s inventory worth, a Qualcomm takeover might nonetheless mark one of many largest tech business acquisitions ever. Intel has a market capitalization of over $93 million. The chipmaker generated $54.2 billion in income through the 2023 fiscal yr, about $18 billion greater than Qualcomm.

In the present day’s report means that Qualcomm may promote some Intel models as a part of the transaction. One seemingly candidate for a by-product is Intel’s foundry enterprise, which manufactures chips designed by different firms. Earlier this month, the unit began shifting to a brand new organizational construction that may make an eventual spinoff significantly less complicated. 

Offloading Intel’s foundry enterprise might assist drive down the acquisition worth for Qualcomm. Moreover, it will allow the corporate to keep away from getting into a posh market by which it has restricted expertise. Qualcomm is a fabless chip provider that designs processors however doesn’t produce them, which implies that taking up the manufacturing operations of Intel’s foundry unit may show a problem.

Any acquisition that the businesses could ink would seemingly draw antitrust scrutiny. For Qualcomm, limiting the scope of the deal to solely a subset of Intel’s enterprise models would have the additional advantage of decreasing regulatory strain.

In the present day’s report comes just a few weeks after sources advised Reuters that Qualcomm is searching for to purchase components of Intel’s chip design group. In accordance with the tipsters, the corporate is especially thinking about buying a unit that designs chips for private computer systems. Intel just lately debuted a brand new laptop computer chip collection, Arrow Lake, that’s significantly extra power-efficient than Qualcomm’s competing processors. 

Picture: Intel