Qualcomm has informally approached Intel about a takeover, in what would be the largest tech merger of all time, according to multiple reports.
Why its matters: This could reshape the U.S. tech industry, and become the next president’s first major antitrust case.
- It also reflects the rapid fall from grace for Intel, which once was the world’s largest chipmaker.
By the numbers: Intel’s stock price has fallen by 36% over the past year, even including a small boost on Friday from the Qualcomm news.
- Its current market cap is around $93 billion, whereas Qualcomm is valued at around $188 billion.
- The largest tech merger to date was Microsoft buying Activision Blizzard for $69 billion. There also was Broadcom’s $117 billion bid for Qualcomm in 2017, but that deal was blocked by former President Trump on national security grounds.
The big picture: Intel’s troubles began before the rise of generative AI, but it didn’t recognize how the market was about to change — namely in favor of the types of chips made by rival Nvidia, which now is worth $2.85 trillion.
- Intel also is a major recipient of capital commitments from the CHIPS Act, which is aimed at increasing domestic chipmaking capacity.
Zoom out: San Diego-based Qualcomm hasn’t yet made an official offer for Santa Clara, Calif.-based Intel, nor explained publicly how it would finance such a giant acquisition.
- There also are questions about strategic fit, given that Qualcomm has never operated a chipmaking fab, and if Intel would swallow its pride and accept, or if it would fight (much like Qualcomm did in the Broadcom situation).
- But the biggest sticking point could be U.S. antitrust regulators, given the sheer size and strategic importance of both companies.
