According to industry insiders, Qualcomm Inc. (QCOM, Financial) has cooled its interest in acquiring Intel Corporation (INTC), which could have been one of the largest tech deals in history. The complexity of acquiring Intel's entire business has diminished Qualcomm's enthusiasm for the transaction. There remains a possibility that Qualcomm might focus on acquiring parts of Intel’s business or rekindle its interest later.
Qualcomm had initially engaged in preliminary discussions with Intel regarding a potential acquisition. However, Intel's recent disappointing earnings report, which included lackluster revenue forecasts and plans to cut 15% of its workforce, has posed financial, regulatory, and operational challenges. The deal would involve taking on more than $50 billion in debt and undergoing extensive antitrust reviews, particularly in China, a critical market for both companies.
Additionally, Qualcomm would have to manage Intel's loss-making semiconductor manufacturing division, an area in which Qualcomm lacks experience. Qualcomm is aiming to venture into new markets, including personal computers, networks, and automotive chips, to generate an additional $22 billion in annual revenue by fiscal year 2029. CEO Cristiano Amon recently stated there is no major acquisition currently planned to achieve this target.
Despite Intel's efforts to reshape itself, it has struggled to compete with rivals like NVIDIA (NVDA) that have excelled in supplying chips for artificial intelligence. As of now, Intel's market value stands at approximately $107 billion, with its stock price falling about 51% this year. Any transaction involving Intel would be among the largest in history. Intel CEO Pat Gelsinger remains determined to unify the company and has the board’s support in his plans. Intel is also negotiating with potential investors regarding its Altera programmable chip division, with a process expected to conclude early next year.
