Qualcomm may buy Intel

Dolina Qualcomm, a leading maker of chips for mobile devices, has made a takeover offer for Intel, the Wall Street Journal reported, citing sources familiar with the situation. Intel has been struggling recently to transition to AI processors and regain its market position. Qualcomm is looking to strengthen its position in the market despite possible attention from antitrust authorities.

Among those concerns, Qualcomm is looking to strengthen its position in the market despite possible scrutiny from antitrust regulators.

Market Reaction

In the wake of the news, Intel shares rose 3.3%, while Qualcomm’s share price fell 2.9%. Qualcomm currently has a capitalization of $188 billion, which is about twice as much as Intel.

The market’s reaction

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Reasons for Qualcomm’s interest

A takeover of Intel would make Qualcomm not only a leader in mobile chips, but also the owner of one of Silicon Valley’s best-known companies, which has played a key role in the creation of modern PCs. However, Intel has struggled in recent years to adapt to the artificial intelligence (AI) processor market.

An acquisition would make Qualcomm not only a leader in mobile devices, but also one of Silicon Valley’s most famous companies, which has played a key role in creating modern PCs.

Reuters reported earlier in September that Qualcomm was exploring the possibility of acquiring parts of Intel, specifically they have an interest in PC design.

Intel’s current situation

Intel is trying to regain its market position by betting on processors for AI and creating contract chip manufacturing, known as foundry. Once a dominant player in chip manufacturing, Intel has lost its leadership in the field in recent years, losing ground to Taiwanese competitors. In addition, the company missed the opportunities that opened up with the boom of generative AI, on which Nvidia and AMD managed to capitalize. One of Intel’s mistakes was its decision not to invest in OpenAI, the company that created ChatGPT.

Problems and Challenges

Since August, Intel’s stock has fallen 25%. The company announced plans to cut more than 15% of its workforce and suspend dividends as part of its strategy to rebuild its business.

Although Qualcomm and Intel are both leading chip makers in the U.S., their business models differ significantly. Qualcomm designs chips under licenses from Arm Holdings and outsources their manufacturing. While Intel designs chips based on its own architecture and manufactures them itself, making it one of the few U.S. companies with a full manufacturing cycle.

Aqucomm and Intel are both leading U.S. chip makers.

Possible obstacles to the deal

Intel declined to comment on the news, and Qualcomm did not respond to Reuters’ inquiries. However, the deal between Qualcomm and Intel is far from finalized. As the WSJ notes, even if Intel is interested in the offer, a deal of this magnitude would inevitably draw the attention of antitrust authorities.

Intel declined to comment on the news, and Qualcomm responded to Reuters’ inquiries.

To be successful, Qualcomm may have to sell some of Intel’s assets or divisions to other buyers.

At the very least, Qualcomm may have to sell some of Intel’s assets or divisions to other buyers.

Intel’s Future in the Market

Analysts and investors expect Intel could be excluded from the Dow Jones Industrial Average index. The company’s stock is down 56% in 2024, making it the worst performer in the index and leaving it with the lowest share price among Dow companies. Intel, however, remains in the game. Its contract manufacturing arm has signed an agreement with Amazon’s cloud division to produce custom AI chips, providing some solace to worried investors.

An agreement with Amazon’s cloud division to produce custom AI chips was a welcome relief to worried investors.