Qualcomm CEO Cristiano Amon speaks at the Computex Forum in Taipei, Taiwan, June 3, 2024.
Ann Wang | Reuters
Qualcomm recently approached the struggling chipmaker Intel about an acquisition, CNBC confirmed.
It was unclear whether Intel had been involved in talks with Qualcomm or what the terms would be, according to a person familiar with the matter who asked not to be identified because the information was confidential.
The Wall Street Journal was the first to reference for the subject. Intel shares first appeared on the news before closing up about 3%, while Qualcomm shares fell about 3% at the close.
The deal, if it goes through, would be one of the biggest tech mergers ever. Intel has a market capitalization of over $90 billion.
Intel, once the world’s largest chipmaker, has been on a years-long downward spiral that accelerated in 2024. The stock posted its biggest daily drop in more than 50 years in August after the company reported disappointing earnings. Intel shares are down 53% this year as investors cast doubt on the company’s costly plans to manufacture and design chips.
Qualcomm and Intel compete in many markets, including computer and laptop chips. However, Qualcomm, unlike Intel, does not manufacture its own chips and instead relies on companies such as Taiwan Semiconductor Manufacturing Company and Samsung to manage production.
On Monday, after a board meeting to discuss strategy, Intel CEO Patrick Gelsinger sent a memo to staff that reiterated the company’s commitment to invest heavily in the foundry business, a project that could to cost $100 billion over the next five years. He also said he was weighing outside investment.
Intel also missed out on the artificial intelligence boom that has captured Wall Street’s attention. Most of the advanced AI programs, such as ChatGPT, run on Nvidia GPUs, rather than Intel CPUs. Nvidia has more than 80% of the fast-growing market, according to analysts.
Qualcomm generates less revenue than Intel. It reported $35.8 billion in sales in fiscal 2023, compared with Intel’s $54.2 billion in the same period.
A potential deal would be complicated by antitrust and national security issues. Both Intel and Qualcomm operate in China, and both have seen deals voided by Chinese antitrust enforcement authorities. Intel failed in its attempt to acquire Tower Semiconductor, as did Qualcomm in its attempt to acquire NXP Semiconductor.
Other gigantic acquisitions in space have also disappeared. In 2017, Broadcom made an offer to buy Qualcomm for more than $100 billion. The Trump administration blocked the deal the following year on national security grounds because Broadcom was headquartered in Singapore at the time. And in 2021, the Federal Trade Commission sued to block Nvidia’s attempt to buy Arm on antitrust grounds. The deal was canceled in 2022 after additional pressure from regulators in Europe and Asia.
Representatives for Qualcomm and Intel declined to comment.
