By Swann Collins, investor, writer and consultant in international affairs – Eurasia Business News. September 21, 2024. Article no 1235.
Qualcomm has recently made a takeover approach to Intel, signaling a potential major shift in the semiconductor industry, according to people familiar with the matter.
Qualcomm CEO Cristiano Amon is personally involved in the negotiations to acquire five-decade-old Intel, reported a source who was briefed on the matter.
This move comes at a time when Intel, once a dominant force in chip manufacturing, has been struggling to maintain its position in the rapidly evolving tech landscape. The market value of Intel is now worth $ 93 billion.
Intel’s Recent Challenges
Intel has been facing significant difficulties, with its shares plummeting by 54% this year. The company founded in 1968 has been forced to cut jobs, suspend dividends, and has experienced a high-profile board member resignation.
Intel’s struggles have led to speculation about its potential removal from the Dow Jones Industrial Average index. Nvidia and Texas Instruments are potential candidates to replace Intel in the Dow.
Qualcomm’s Strategic Move
Qualcomm’s approach to Intel is seen as a bold move in the semiconductor industry.
Earlier this month, Qualcomm had explored the possibility of acquiring portions of Intel’s design business to boost its product portfolio. The market value of Qualcomm is now at $ 188 billion.
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Market Reaction
Following the news, Intel’s shares closed up 3.3%, while Qualcomm’s shares were down 2.9%.
The report of the takeover approach led to an 8% increase in Intel’s stock price.
Regulatory Scrutiny
A deal of this magnitude would likely face significant antitrust scrutiny. To navigate these challenges, Qualcomm might consider selling certain assets or parts of Intel to other buyers.Industry Implications:
This potential acquisition could reshape the competitive landscape in the semiconductor industry.
It may help Qualcomm expand its presence in areas where Intel has traditionally been strong, such as server chips.
Outlook of a possible takeover
While the deal is far from certain, it represents a significant development in the tech industry. Both companies face challenges and opportunities according to John Meyer, consultant in finance for Eurasia Business News :
Intel: Needs to revitalize its business and regain its competitive edge in the AI era and amid a competitive semiconductor industry.
Qualcomm: Seeks to expand its product portfolio and market presence, in a context of sound financial position, with its shares growing by 20.46% this year.
The outcome of this approach could have far-reaching implications for the global semiconductor market and the broader tech industry.
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© Copyright 2024 – Eurasia Business News. Article no. 1235
Eurasia Business News 