Citing analysts, the report further says that the deal of two major chip companies is likely to face intense antitrust scrutiny worldwide, as it would create a giant with significant market share in smartphones, PCs, and servers.
“The rumoured deal between Qualcomm and Intel is intriguing on many levels and, from a pure product perspective, makes a certain degree of sense as they have a number of complementary product lines,” Bob O’Donnell, TECHnalysis Research founder, was quoted as saying.
“The reality of it actually occurring, however, is very low,” he noted, adding that “it is unlikely Qualcomm would want all of Intel and trying to break apart the product business from the foundry business right now just would not be possible.”
Qualcomm eyeing expansion of business beyond smartphones
The report says that Qualcomm is bolstering its efforts to expand beyond its smartphone business. The company has already launched chips for Microsoft Copilot+ laptops as well as for automotive applications. Reuters previously reported that Qualcomm CEO Cristiano Amon is personally involved in the Intel negotiations.
Qualcomm lacks experience in foundry business
While Intel designs and manufactures its own chips that power personal computers and data centres, Qualcomm relies on TSMC for chip-making and is dependent on Arm Holdings for other technology. Analysts have also expressed doubts about Qualcomm’s ability to successfully manage Intel’s foundry business while questioning the rationale behind such an acquisition.
Meanwhile, Intel’s foundry business is seen as crucial to the US’ aim to grow domestic chip manufacturing. The company has secured about $19.5 billion in federal grants and loans under the CHIPS Act to build and expand factories across four US states.