Qualcomm has recently initiated discussions with Intel to explore a potential acquisition, reports Reuters citing sources.
The talks, which involve Qualcomm CEO Cristiano Amon, are at an early stage, with no formal offer yet made for the chipmaker.
Qualcomm’s interest in Intel comes at a time when the latter is facing market challenges, with its shares having lost nearly 60% of their value since the beginning of 2024.
The San Diego-based Qualcomm, which has a market value of $188bn, is reportedly examining Intel’s entire portfolio, including its PC design unit.
According to a source briefed on the negotiations, Amon is personally involved in examining various options for a deal.
Earlier this month, it was reported that Qualcomm had shown interest in acquiring portions of Intel’s design business.
However, the conversations have not progressed to a formal offer stage, and Intel declined to comment.
Requests for comments from Qualcomm also did not elicit a response.
A potential acquisition by Qualcomm would likely face intense scrutiny from antitrust regulators in the US, China, and Europe.
There is speculation that Qualcomm might have to divest parts of Intel to gain regulatory approvals.
If it proceeds, this bid would be the largest takeover attempt in the technology industry since the thwarted Broadcom bid for Qualcomm in 2018.
Financing the acquisition remains a question, as Qualcomm has around $13bn in cash, and it is unclear how it would manage Intel’s contract manufacturing business, given that Qualcomm has no history of operating chip factories.
Intel, on the other hand, has been focusing on a turnaround strategy, including an emphasis on artificial intelligence processors and establishing a foundry business.
In a separate development, Bloomberg reported that Apollo Global Management has offered to invest up to $5bn in Intel, which could be a boost to the chipmaker’s efforts to revitalise its business.
Intel is also making strategic moves such as pausing construction on factories in Poland and Germany, reducing real estate holdings, and securing a deal to produce a custom networking chip for Amazon’s AWS.
