According to informed sources, Qualcomm's interest in acquiring Intel has cooled.
According to Zhitong Finance, informed sources have revealed that Qualcomm (QCOM.US) has lost interest in acquiring Intel (INTC.US), which makes this potential deal one of the largest technology trades in history fall through. Some insiders stated that the complexity of acquiring all of Intel's business has reduced the appeal of this deal for Qualcomm. They added that Qualcomm could always shift focus to parts of Intel's business or rekindle interest later.
Zhitong Finance previously reported that Qualcomm had preliminary contact with Intel regarding a possible acquisition. Just a few weeks ago, Intel released a disappointing earnings report, which included a disappointing revenue forecast and outlined plans to lay off 15% of its workforce to "right-size and refocus."
However, this deal faces numerous financial, regulatory, and operational obstacles, including taking on over $50 billion in debt from Intel. This deal could attract lengthy and arduous antitrust scrutiny, including reviews in China, which is a key market for both companies.
Moreover, Qualcomm would have to take over Intel's loss-making semiconductor manufacturing division, in which Qualcomm has no experience. Qualcomm has been looking to new markets including personal computers, networking, and automotive chips, aiming to generate an additional $22 billion in annual revenue before fiscal year 2029.
Qualcomm CEO Cristiano Amon stated in an interview last week, "Currently, we have not yet identified any large acquisitions that require us to execute this $22 billion."
Until recently, by value, Intel was still one of the largest chip manufacturers in the world. The company is working hard to reshape itself. Competitors like Nvidia (NVDA.US) have been leading in supplying chips that meet ai demand. Intel currently has a market cap of approximately $107 billion. Although the company's stock price has fallen about 51% so far this year, any deal involving this chip manufacturer would be one of the largest in history.
Intel CEO Pat Gelsinger stated in an interview earlier in November that he intends to maintain the unity of the company and gain the board of directors' support for his plans, noting that he has "a lot of energy and passion" to achieve this goal. In the interview, he said: "Clearly, Intel has received a lot of attention, which only reinforces its core position in the technology industry. We believe our strategies are distinctive, but they work better together."
Intel is negotiating with potential investors regarding its Altera programmable chip division. It expects to complete this process by early next year. According to previous reports, Lattice Semiconductor (LSCC.US) intends to acquire all of Altera's equity, while private equity firms plan to acquire a minority stake.