Will Qualcomm Buy Intel? Possibilities and Challenges of the Biggest Tech Merger
The exclusive news published by The Wall Street Journal on Friday, September 20, made the biggest buzz in the tech industry. According to the WSJ, Qualcomm has informally approached Intel with an offer to acquire it. The news could turn out a reality as Intel has been in its position for generations and its share dipped by 36% this year alone. However, with the news of the acquisition, the stock price of Intel jumped by 3%.
If this acquisition takes over, it will be the biggest tech merger so far, however, there is no official arrangement made yet as confirmed by the New York Times in the late evening of Friday. But the question is worth discussing – will Qualcomm buy Intel? Is this merger possible?
Is there any possibility of Qualcomm and Intel merging?
Yes, there is a possibility of the acquisition of Intel by Qualcomm as Intel is in its weakest position with a massive drop of 36% to the year. In this case, this merger could be a win-win situation for both entities. However, Qualcomm unofficially approached Intel for a takeover, so there is no official agreement yet.
Even though the merger of Qualcomm and Intel would be the biggest in the tech industry, the proceedings are not that easy. Both companies are global and run their business in multiple countries, and they have to get approval at multiple levels which is again going to be a very complex process. It should also be noted that Intel has multiple businesses and works on multiple divisions, we have no clear news on which business Qualcomm is willing to acquire.
Qualcomm is alone not interested in the business of Intel, Apollo has also shown interest in multibillion-dollar investment in Intel. A report published in Fortune, claims that Apollo is ready to make a hefty investment of 5 billion dollars in Intel. However, no official announcement or arrangement was made here also.
Meanwhile, the biggest tech merger to date was made between Microsoft and Activision Blizzard of $69 billion. The market cap of Qualcomm Inc. and Intel Inc. is 188 billion USD and 93 USD, respectively. So, if the deal between these two giants is finalized, it would be the biggest tech merger so far.
An Overview of Qualcomm and Intel Market Share
Qualcomm Market Share –
- Global smartphone application processor market share – 27%
- Stock Price – $168.92 (dipped 2.87% as of 23 September 2024)
- Stock Ownership – 64.92% owned by institutional investors, insiders 2.25%, public companies & individual investors 32.83%
- Market Cap – $188.18 billion
Intel Market Share –
- Global X86 market share – 68.4%
- Laptop CPUs market share – 71%
- Computer CPUs market share – 64%
- Global semiconductor market share – 9.1%
Challenges of Acquisition of Intel by Qualcomm
The deal also runs through a great dilemma – Qualcomm is considered the cell phone chip maker company (70% of the business comes through mobile chip making) and investors also treat it that way. On the other hand, Intel is known as the biggest chipmaker company in the PC world.
To make an acquisition and merger, Qualcomm also has to diversify its portfolio in the PC chip maker. The merger may confuse the investors (and customers too) whether they investing in a mobile chip-making company or a PC chip-making company. Even though the acquisition financially will help Intel as it is going through a dribble in stocks, it should be kept in mind that this deal won’t help otherwise as Qualcomm has no factories of its own.
If we think about this business deal, it has great significance for the tech industry. The biggest harm this deal will do is to NVidia, the rival of both Qualcomm and Intel. NVidia is not directly involved in the chip-making business but it has had a monopoly over the AI chip market for years. The merger of these two giants may make them capable of challenging NVidia’s dominance with enhanced operations of both companies.
Conclusion
Merging and acquisitions between companies have been common business strategies for years. Qualcomm and Intel are two tech giants in the field of chip-making; mobile and PC, respectively. Though not officially announced, this merger can shake up the tech industry with the biggest deal so far in terms of monetary and assets. So, will Qualcomm buy Intel? There is no clear answer, we have to wait for this. However, if finalized, the merging could be a lifeline for Intel which is showing a continuous plunge in its market share and stock price.
