Reports in September this year showed that Qualcomm was considering acquiring Intel’s chip development business. The move may have helped Qualcomm expand its product line and strengthen its position in the semiconductor market, especially after Blue Team has struggled to grow in recent years. The agreement was suspended during the US elections. However, now Qualcomm’s interest in purchasing Intel seems to have diminished.

Qualcomm has been making mobile chips for a long time, and this time it was involved in client computer design, where Intel designs chips for laptops and desktops. With the recent push for ARM processors in PCs, Qualcomm has many products that can run on PCs as well. This acquisition will help Qualcomm continue to grow its PC business. Despite all these advantages, Qualcomm never formally approached Intel about an acquisition, and most talks remained only in the preliminary stages.

The Blue Team, on the other hand, has faced significant challenges over the last few years. Intel is seeing its market share decline in both the consumer and enterprise sectors. The company reported a 14% decline in revenue in 2023 compared to 2022. Intel also has manufacturing units (where semiconductors are made), but it is struggling with production, losing more than $7 billion in 2023, and is increasingly turning to outsourcing to companies like Taiwan Semiconductor Manufacturing Corporation (TSMC). As part of the new strategic plan, Intel considered selling non-core business units and reducing capital expenditures to improve cash flow.

Although Qualcomm initially expressed interest in acquiring some of Intel, Bloomberg reported that interest has since waned. Perhaps the most significant hurdle for Qualcomm in this potential acquisition is the regulatory scrutiny that any merger between two major semiconductor companies would bring. Given the scope and impact of such a deal on the market, regulators in the U.S. and abroad will monitor it closely for potential antitrust violations. AMD and Intel also have a reciprocal cross-licensing agreement that allows both companies to use each other’s proprietary technologies. AMD licenses the x86 architecture from Intel, while Intel licenses the x86-64 (AMD64) extension from AMD. However, if either company undergoes a change in management, such as an acquisition, that would complicate the deal, the deal is automatically terminated.

Despite the challenges, Intel still has a large market cap of around $96 billion, which raises the question of whether Qualcomm can afford to acquire Intel. Acquiring this level would place a significant financial burden on Qualcomm and could be extremely difficult for the company to deal with Intel’s ongoing challenges.