Qualcomm Explores Acquisition of Rival Intel Amid Industry Shifts

San Diego-based Qualcomm has initiated discussions with Intel about a potential acquisition, according to The New York Times. While no formal offer has been made, the talks remain confidential and regulatory challenges abound. The move could reshape the semiconductor industry and impact global market dynamics.

Qualcomm, the San Diego-based chipmaker, has reportedly approached its rival Intel about a potential acquisition, as reported by The New York Times on Friday. Although no formal offer has been made, discussions have taken place in recent days, highlighting the possibility of a landmark deal between two of the largest chipmakers in the world.

The report indicated that the talks are confidential, with the likelihood of a deal remaining uncertain due to regulatory challenges and the complexity of Intel's operations. According to sources, Qualcomm has not yet made an official offer for Intel, and significant obstacles remain. Any deal would likely draw significant regulatory scrutiny, given the massive size and national security importance of both companies.

Intel, once a dominant force in the semiconductor industry, has faced significant setbacks in recent years. Issues include management problems, missed technological transitions, and its failure to capitalize on the rise of mobile chips and artificial intelligence (AI). Intel's manufacturing capabilities have also lost ground to rivals. In August, the company reported a quarterly loss of USD 1.6 billion and announced plans to cut 15,000 jobs, while pausing new plant setups in Germany and Poland.

Qualcomm, which specializes in cellular technology and provides chips for major smartphone makers like Apple and Samsung, has seen its stock rise by 55 per cent recently, giving it a market value of USD 169 billion. In contrast, Intel's shares have fallen by nearly 40 per cent, currently valuing the company at USD 93 billion. A potential deal between the two would likely be costly and face intense regulatory scrutiny.

Industry experts suggest that Qualcomm may be more interested in acquiring Intel's chip design operations and expertise in PC software rather than its foundry business. Given Qualcomm's history of outsourcing production, it remains uncertain whether the company would want to take on Intel's manufacturing arm.

Both Qualcomm and Intel declined to comment on the reports. However, if Qualcomm's bid progresses, it could signal a significant shift in the semiconductor landscape, with potential implications for the global chip market and U.S. technological competitiveness.

(With inputs from agencies.)