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Qualcomm approach Intel on a potential takeover

D

delong.height

Active member
Points:
- Qualcomm approached Intel about a takeover in recent days, according to a person familiar with the matter.
- As of the market close on Friday, Intel had a market cap of over $90 billion.
- The shares popped in extended trading after The Wall Street Journal was first to report on the potential deal.

Qualcomm recently approached struggling chipmaker Intel about a takeover, CNBC has confirmed. It wasn’t clear if Intel had engaged in conversations with Qualcomm or what the terms would be, according to a person familiar with the matter who asked not to be named because the information was confidential. The Wall Street Journal was first to report on the matter. Intel shares initially popped on the news before closing up about 3%, while Qualcomm shares fell about 3% at the close.

The deal, if it were to happen, would be one of the largest technology mergers ever. Intel has a market cap of over $90 billion.

https://www.cnbc.com/2024/09/20/qualcomm-reportedly-approached-intel-about-takeover.html


The main problem here is valuation, at what market cap will Qualcomm give, and does that count IFS which has huge PPE cost
 
but if it were to ever go through, it may be good for both company.

Qualcomm gets:

1. great diversification with PC, Data center, edge
2. controlling altera(FPGA, 2nd largest), which Qualcomm never has a position in. mobileye (great complement to their in-house chassis approach). IFS (which they don't have to pay TSMC and have a reserved capacity).
3. Intel is cheap, it's going to be a fantastic investment for what they acquired at.
4. great assets in GPU, can potentially compete with Nvidia in AI data center.
5. become vertically integrated. (IFS get the volume of both Intel and Qualcomm for sure). Not big as TSMC for sure, but it is really big. Also IFS getting a great ARM exposure.

Intel gets:
we not sure what the market cap they are willing to assign, which I guess is 200B. Investor probably aren't going to sell it below book value for sure. And there's a big premium despite the market sentiment.
 
Mad. Though there are no doubt Wall Street types pushing for a deal involving Intel (any deal for these guys). And an active market for such rumours these days. Only makes sense for the bankers and lawyers taking their cut.

Antitrust: if nVidia were't allowed to buy ARM (a critical industry supplier), why on earth would Qualcomm be permitted to own IFS (since that's now the designated US domestic foundry - the CHIPS Act says so, regardless of whether it has any market share yet, it's only getting the money on the basis that it will be) ?

Intel needs more chaos like a hole in the head. Too much hokey cokey strategy over the past decade (let's buy WindRiver/MobileEye/Altera ... no let's sell them ... let's hire 20K more staff ... hold on we're 20K overstaffed ...). Just stick at something.
 
tooLongInEDA said:
Mad. Though there are no doubt Wall Street types pushing for a deal involving Intel (any deal for these guys). And an active market for such rumours these days. Only makes sense for the bankers and lawyers taking their cut.

Antitrust: if nVidia were't allowed to buy ARM (a critical industry supplier), why on earth would Qualcomm be permitted to own IFS (since that's now the designated US domestic foundry - the CHIPS Act says so, regardless of whether it has any market share yet, it's only getting the money on the basis that it will be) ?

Intel needs more chaos like a hole in the head. Too much hokey cokey strategy over the past decade (let's buy WindRiver/MobileEye/Altera ... no let's sell them ... let's hire 20K more staff ... hold on we're 20K overstaffed ...). Just stick at something.
Click to expand...
I think US government likely wants to see it happen as the combine chip volume (Intel and Qualcomm) should be able to support US fab build out. David Zinsner mentioned before they do not need a lot of external customers to get IFS working. With Qualcomm size, I guess it would make IFS work very quickly.

Also, their (Intel and Qualcomm) product mixes are complementary. The end entity should be able to challenge Nvidia's dominance.

Based on the past talks by Cristiano, he seems to be a leader who like to challenging status quo. Intel needs a leader like that.
 
delong.height said:
but if it were to ever go through, it may be good for both company.

Qualcomm gets:

1. great diversification with PC, Data center, edge
2. controlling altera(FPGA, 2nd largest), which Qualcomm never has a position in. mobileye (great complement to their in-house chassis approach). IFS (which they don't have to pay TSMC and have a reserved capacity).
3. Intel is cheap, it's going to be a fantastic investment for what they acquired at.
4. great assets in GPU, can potentially compete with Nvidia in AI data center.
5. become vertically integrated. (IFS get the volume of both Intel and Qualcomm for sure). Not big as TSMC for sure, but it is really big. Also IFS getting a great ARM exposure.

Intel gets:
we not sure what the market cap they are willing to assign, which I guess is 200B. Investor probably aren't going to sell it below book value for sure. And there's a big premium despite the market sentiment.
Click to expand...
Not to mention software assets.
 
XYang2023 said:
I think US government likely wants to see it happen as the combine chip volume (Intel and Qualcomm) should be able to support US fab build out. David Zinsner mentioned before they do not need a lot of external customers to get IFS working. With Qualcomm size, I guess it would make IFS work very quickly.

Also, their (Intel and Qualcomm) product mixes are complementary. The end entity should be able to challenge Nvidia's dominance.

Based on the past talks by Cristiano, he seems to be a leader who like to challenging status quo. Intel needs a leader like that.
Click to expand...
are you serious,
Intel doesn't want to use its own foundry and expecting qualcomm to save it.
 
jim_22222 said:
are you serious,
Intel doesn't want to use its own foundry and expecting qualcomm to save it.
Click to expand...
Panther Lake uses 18A. Based on what we discussed here, 18A should be alright for chiplets. The chips produced by Qualcomm are not large in size, I think. By having its "own fabs", Qualcomm can drive up/maintain market share.
 
Qualcomm and Intel client would have synergies. Intel's margins and ASPs are being pressured because Qualcomm laptop chips are being sold for around half of Intel's chips. Combined with N3B, Intel's margins don't have much opportunity for expansion (projected QoQ drop from 39% to 38%) unless Granite Rapids comes through (sierra forest is probably beat by hyperscaler CPUs on performance, efficiency, cost). Even then, it would be next year, the last 2 quarters for this year would probably be sub 40% margins
 
tooLongInEDA said:
Antitrust: if nVidia were't allowed to buy ARM (a critical industry supplier), why on earth would Qualcomm be permitted to own IFS (since that's now the designated US domestic foundry - the CHIPS Act says so, regardless of whether it has any market share yet, it's only getting the money on the basis that it will be) ?
Click to expand...
they can make the argument that by joining hand, IFS can have better success to be the lead in driving next generation of technology in US. Or they could IPO IFS, and retain other design in-house
 
XYang2023 said:
Panther Lake uses 18A. Based on what we discussed here, 18A should be alright for chiplets. The chips produced by Qualcomm are not large in size, I think. By having its "own fabs", Qualcomm can drive up/maintain market share.
Click to expand...
Intel was a 70billion company before and seeing market share disappearing with its own fabs . you think qualcomm will be different
 
delong.height said:
for 18A (the next generation), that is currently the case. but not this gen
Click to expand...
Intel does make its DC server CPUs with its own node process. Xeon6E and 6P are on Intel 3. I believe it is more important for them to control the supply for the server segment more than client as the competitive pressure is more on the server side.
 
jim_22222 said:
Intel was a 70billion company before and seeing market share disappearing with its own fabs . you think qualcomm will be different
Click to expand...
We saw confirmation from Amazon regarding 18A. For Intel's valuation, it is due to near-term financial. The acquisition could be able to address the financial by combining volumes (scale). The valuation should reflect that.
 
XYang2023 said:
We saw confirmation from Amazon regarding 18A. For Intel's valuation, it is due to near-term financial. The acquisition could be able to address the financial by combining volumes (scale). The valuation should reflect that.
Click to expand...
could it be a merger instead of acquisition? Instead of one CEO who oversaw pc, mobile, rf, auto, data center, ar/vr, ifs, gpu, why not have two co-CEO, one for product, and one for foundry

maybe ifs don't need to be spin off, just a reorganizing, design side go to qualcomm, where foundry go to intel.
 
delong.height said:
could it be a merger instead of acquisition? Instead of one CEO who oversaw pc, mobile, rf, auto, data center, ar/vr, ifs, gpu, why not have two co-CEO, one for product, and one for foundry

maybe ifs don't need to be spin off, just a reorganizing, design side go to qualcomm, where foundry go to intel.
Click to expand...
just forget about it and research something with higher possibilities.
this won't get approved.
 
delong.height said:
could it be a merger instead of acquisition? Instead of one CEO who oversaw pc, mobile, rf, auto, data center, ar/vr, ifs, gpu, why not have two co-CEO, one for product, and one for foundry

maybe ifs don't need to be spin off, just a reorganizing, design side go to qualcomm, where foundry go to intel.
Click to expand...
www.datacenterknowledge.com

AMD Completes Record ~$50 Billion Acquisition of Xilinx

The largest deal in semiconductor history promises exciting times for FPGA technology.
www.datacenterknowledge.com www.datacenterknowledge.com

They could use equity, similar to what AMD did to Xilinx.
 
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