Intel Corp. shares rose after The Wall Street Journal reported that Qualcomm Inc. had approached the corporate about an acquisition – a possible record deal for the chip industry.
The talks took place in recent days, the newspaper reported, citing anonymous people acquainted with the situation. Nevertheless, a deal is anything but certain, the Journal said. Representatives from Intel and Qualcomm declined to comment.
Shares rose 3.4 percent to $21.87 in New York trading on Friday, recovering from a decline the day before. The stock continues to be down 56 percent this yr.
Intel, once the world’s largest chipmaker, is scuffling with falling sales and rising losses – exacerbated by the lack of its technological lead. The company’s market capitalization of $93.5 billion is now about half that of Qualcomm. Nevertheless, a takeover can be the most important transaction of all time within the semiconductor market and will fundamentally change the industry.
Shares of San Diego-based Qualcomm fell 2.9%, reflecting investor concerns in regards to the risks of such a deal.
Santa Clara, California-based Intel this week announced a series of changes designed to get its business back on target. The moves included a multibillion-dollar cope with Amazon.com Inc. to make a customized AI semiconductor and a plan to show Intel’s ailing manufacturing business into a completely owned subsidiary.
Qualcomm is the world’s largest developer of smartphone processors, but is attempting to expand into other areas, including chips that power personal computers, where Intel continues to be the dominant supplier.
Like much of the industry, Qualcomm doesn’t manufacture its own chips. The company outsources production to partners resembling Taiwan Semiconductor Manufacturing Co., which also makes chips for Nvidia Corp. and Advanced Micro Devices Inc.
By acquiring Intel, Qualcomm could potentially gain access to its own production within the US while becoming the most important brand within the PC and traditional server computer market.
But Intel’s problems wouldn’t be solved by a takeover by Qualcomm. The potential suitor also has no experience in manufacturing or the science behind cutting-edge production technology – an area through which TSMC excels.
Qualcomm was involved in a controversial takeover saga greater than six years ago when Broadcom Inc. attempted to accumulate the corporate. Broadcom withdrew from the offer after President Donald Trump blocked the dealand pointed to risks to national security.
