According to sources cited by Bloomberg, Qualcomm is currently holding off on making a final decision regarding an alleged acquisition offer to Intel. The Snapdragon chip maker is waiting for the outcome of the US presidential election, as the new administration in the White House could significantly impact such a large-scale negotiation between two major technology companies.
Qualcomm seems to be assessing the political climate and potential regulatory changes that could come with a new president, which might affect the viability and strategic direction of a potential deal with Intel. The decision is expected to come after January, once the presidential transition has occurred, if any.
Changes in the world political scenario
Qualcomm’s decision to hold off on making an acquisition offer to Intel is closely tied to potential changes in market regulatory bodies, particularly in the U.S. A deal of this magnitude would reshape the global chip production landscape. It would need approval from regulatory authorities in multiple countries as two of the largest customers of Intel and Qualcomm, the U.S. and China, would play crucial roles in the review process.
As seen in the case of Microsoft’s acquisition of Activision Blizzard, regulatory bodies across the globe, such as the U.S. Federal Trade Commission (FTC), the UK Competition and Markets Authority (CMA), and Cade in Brazil, would need to evaluate the impact of a potential Qualcomm-Intel merger on competition and the broader industry.
Intel is a pivotal player in the semiconductor industry in the U.S., and its importance could make it particularly challenging for Qualcomm to acquire the company successfully. The deal would likely face intense scrutiny, especially from the FTC, given the need to ensure the acquisition does not harm competition.
Additionally, regulators from various other nations would need to consider the deal’s impact on global markets, supply chains, and the future of semiconductor production.
Intel’s recent crisis
Qualcomm’s potential interest in acquiring Intel seems to stem from the recent turmoil Intel faced with its 13th and 14th generation Raptor Lake processors. Users, ranging from individuals to businesses, reported performance issues with these CPUs, creating a challenging situation that went unresolved for months.
Intel’s delayed response, led by CEO Pat Gelsinger, frustrated customers and shareholders, who eventually filed a collective lawsuit against the company.
Intel initially blamed motherboard manufacturers for issues related to high voltage affecting CPU performance. However, just a month ago, Intel finally revealed the root causes of the problems and released a microcode update to address them. The months-long crisis significantly damaged Intel’s reputation, causing a company stock value drop and triggering internal restructuring plans.
These developments may have piqued Qualcomm’s interest, viewing Intel’s weakened state as an opportunity for a strategic acquisition. With Intel currently valued at around US$98 billion, a possible merger would represent a significant transaction.
Qualcomm, historically dominant in mobile chipsets through its Snapdragon line, could leverage Intel’s expertise in the PC and server CPU market to expand its influence in the broader semiconductor industry.
If this acquisition were to happen, it would create a massive shift in the tech landscape, combining Qualcomm’s strengths in mobile and AI with Intel’s legacy in computing power, likely impacting global competition and innovation.
