For the second time in two weeks, rumors surfaced that the world’s largest manufacturer of processors for smartphones, Qualcomm, would acquire part or all of the world’s largest PC processor manufacturer, Intel. Such a transaction could thoroughly upset the market order of power in the market of client-side CPU solutions, but at the same time – precisely for this reason – the parties could expect serious opposition from the competition authorities.
A The Wall Street Journalban According to a report published on Friday, Cristiano Amon, the CEO of Qualcomm, also participated in the first soft negotiations, who could outline the acquisition of the forty-year-old processor manufacturer according to several scenarios. According to the newspaper’s sources, however, the agreement is still far away, but at least no official offer has yet been received from the company.
The papers first wrote about a potential Qualcomm-Intel deal at the beginning of September, mentioning even fewer specifics then.
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According to the sources at the time, Qualcomm, which does not have its own factories, may be most interested in the division that develops Intel’s processors built into clients, i.e. PCs, which in recent quarters had to face a serious drop in turnover due to the stagnation of the PC market.
This only added to Intel’s years-long suffering of gradual technological backwardness linked to bad management decisions, which culminated in the company’s extremely poor business results reported in its last quarter and the announcement of the layoff of 15% of the workforce at the end of August.
The business and power relations of the two companies are well indicated by two financial data, so that last year Intel’s client business produced a total of 29.3 billion dollars in sales revenue, while Qualcomm, which primarily produces smartphone processors and modems, received a total of 35.82 billion dollars.
It is also telling that Qualcomm, with a market value exceeding 188 billion dollars, is worth almost a hundred billion dollars more than Intel at the moment.
This also means that if Qulacomm were to take Intel together, it would be the second most valuable technology acquisition of all time. The first is also related to Qualcomm, since in 2018 Broadcom made a $142 billion acquisition offer for the company, but in the end the Trump administration saw a national security risk in the deal and blocked the deal (Broadcom still had its headquarters in Singapore at the time).
A potential Qualcomm-Intel deal could also fail during the official approval process, as two market-leading processor manufacturers would merge, which could seriously upset the balance of power in the segment. As far as the processor market is concerned, Nvidia last had to back away from its $40 billion acquisition of Arm in 2022, after the competition authorities in the United States, Europe and Asia intervened in the business.
Source: www.hwsw.hu
