Intel Corp. shares rose following a report by the Wall Street Journal indicating that Qualcomm Inc. had approached the company regarding a potential takeover, which could become a record-setting deal in the chip industry.
The discussions reportedly occurred in recent days, though a final agreement remains uncertain, according to individuals familiar with the situation. Both Intel and Qualcomm representatives declined to comment on the matter.
Intel’s shares increased by 3.4% to $21.87 in New York trading on Friday, recovering from an earlier decline. Despite this uptick, Intel’s stock is still down 56% for the year.
Once the leading chipmaker globally, Intel has faced declining sales and increasing losses, compounded by the loss of its technological lead. The company’s market valuation currently stands at approximately $93.5 billion, about half that of Qualcomm’s. If completed, a takeover would represent the largest-ever transaction in the semiconductor market and could potentially reshape the industry.
Qualcomm, based in San Diego, saw its shares decline by 2.9%, indicating investor concerns about the potential risks associated with such a deal.
This week, Intel, headquartered in Santa Clara, California, revealed several strategic changes aimed at revitalizing its business. These included a multibillion-dollar agreement with Amazon.com Inc. to develop a custom AI semiconductor and a plan to restructure its struggling manufacturing operations into a wholly-owned subsidiary.
Qualcomm, the world’s leading designer of smartphone processors, is seeking to diversify into other sectors, including personal computer chips, an area where Intel remains dominant.
Unlike Intel, Qualcomm does not produce its own chips; instead, it outsources manufacturing to partners such as Taiwan Semiconductor Manufacturing Co., which also produces chips for Nvidia Corp. and Advanced Micro Devices Inc.
Acquiring Intel could provide Qualcomm with access to US-based production facilities and a significant presence in the PC and server computer markets. However, the acquisition would not necessarily resolve Intel’s existing challenges. Qualcomm lacks experience in manufacturing and in the development of cutting-edge production technology, areas where TSMC excels.
Qualcomm was previously involved in a significant takeover attempt more than six years ago when Broadcom Inc. sought to acquire the company. That bid was abandoned after President Donald Trump blocked the deal on grounds of national security risks.
