Qualcomm in Talks with Intel for Potential Buy-Out

If an offer follows, it could potentially mark one of the largest takeover bids in the technology industry's history. However, such a move would likely trigger anti-trust scrutiny that could drag on for several quarters and potentially derail the deal.

Following the news, Intel's share price surged above US$20, pushing the company's market capitalization to approximately US$95 billion. Despite this increase, the current share price is significantly lower than the US$50 mark at the beginning of the year, reflecting a substantial decline in Intel's valuation.

While no formal offer has been presented yet, reports suggest that Qualcomm CEO Christiano Amon is spearheading the potential approach. It is believed that Qualcomm would pursue a friendly takeover, as indicated in a report by the Financial Times.

Previously, Qualcomm had shown interest in acquiring certain segments of Intel, particularly its PC processor business. Should a comprehensive acquisition materialize, Qualcomm might opt to divest certain divisions of the company to streamline operations.

Recently, Intel's share price experienced another boost, reaching US$22 following reports that Apollo Global Management has proposed an investment of up to US$5 billion in the company, according to Bloomberg. With additional financial support from Apollo and potential awards from the US Department of Defense, Intel aims to navigate the challenges of 2024 and enhance its performance using the 18A manufacturing process technology in 2025.

Intel has faced significant challenges in recent years, falling behind industry leader TSMC in cutting-edge chip manufacturing. In February 2021, Pat Gelsinger assumed the role of CEO with a strategic vision to revitalize Intel's chip manufacturing capabilities and transition into a foundry operation. However, the success of this transformation is uncertain and could require several years to materialize. The company's financial struggles in 2024, marked by substantial losses amid declining sales, have raised questions about its future trajectory.