Intel's "Sale" Rumor: Where Will the Former World Dominant Go?

A source close to the matter has revealed that Qualcomm, an American company, has been in talks with Intel regarding a potential acquisition.

This news has caused Intel's stock to surge by nearly 9.5% at one point, reaching a high of $23.14 per share, the highest level since August 2nd.

Qualcomm, on the other hand, saw its stock drop by more than 5.5% at one point.

By the close of trading, both the gains and losses had significantly narrowed, with Intel closing up 3.31% and Qualcomm closing down 2.87%.

The source indicated that the negotiations took place in the last few days, and the deal is still far from certain.

In fact, last month there were already reports of communication between Qualcomm and Intel, with the former showing a keen interest in "some of Intel's design business."

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Analysts have pointed out that if Qualcomm's acquisition of Intel is successful, it would be one of the largest tech mergers and acquisitions in history.

Currently, Intel's market capitalization stands at $93.38 billion, compared to the $69 billion Microsoft spent to acquire Activision Blizzard.

Intel was once the world's largest chipmaker but has been in decline in recent years, with the slide accelerating in 2024.

After releasing disappointing financial reports in August, its stock experienced the largest single-day drop in more than 50 years.

Year-to-date, Intel's stock has fallen nearly 56%, as investors question the company's costly chip manufacturing and design plans.

In contrast, the S&P 500, the Nasdaq Composite, and the Philadelphia Semiconductor Index have all risen by nearly 20% this year.

Earlier this week, Intel CEO Patrick Gelsinger sent an internal letter to employees, announcing the next phase of the company's transformation plan, including the independence of chip foundry business, a reduction of 15,000 employees by the end of the year, and the sale of real estate.

Intel's situation is reminiscent of U.S. Steel, with the former being a world-class enterprise in semiconductor design and manufacturing, leading the global industry trend; the latter played an indispensable role in the industrialization process of the United States in the 20th century.

The difference is that the U.S. government has provided Intel with "preferential" assistance to rebuild its position in semiconductor manufacturing - the Department of Commerce announced in March that it would provide Intel with $8.5 billion in subsidies and $11 billion in loans through the CHIPS and Science Act.

However, sources at the beginning of the month said that due to Intel's serious performance decline, it may not be able to smoothly obtain subsidies from the U.S. government.

Analysts believe that being acquired by Qualcomm may also not solve Intel's problems, as Qualcomm has no experience in foundry business and is unlikely to help it compete with TSMC and Samsung.

In addition, potential mergers and acquisitions may be halted by regulatory authorities.

A few years ago, Broadcom's acquisition of Qualcomm and NVIDIA's acquisition of Arm were both canceled under national security and antitrust pressures.