Intelligence Corp. shares rose after the Wall Street Journal reported that Qualcomm Inc. has approached the company about a takeover, a deal that would set a record for the chip industry.
The discussions have been ongoing in recent days, the newspaper said, citing unnamed people familiar with the situation. But a deal is not yet certain, according to the Journal. Representatives for Intel and Qualcomm declined to comment.
Shares rose 3.4% to $21.87 in New York trading on Friday, rebounding from a decline earlier in the day. The stock is still down 56% this year.
Intel, once the world’s largest chipmaker, has struggled with declining sales and mounting losses—exacerbated by its loss of technological edge. Its market valuation, at $93.5 billion, is now about half that of Qualcomm. Still, the acquisition would be the largest-ever semiconductor deal and could transform the industry.
Shares of San Diego-based Qualcomm fell 2.9%, reflecting investor concerns about the risks of such a deal.
Intel, based in Santa Clara, California, announced a series of changes this week aimed at getting its business back on track. The moves include a multibillion-dollar deal with Amazon.com Inc. will make custom AI semiconductors and plans to turn Intel’s struggling foundry business into a wholly owned subsidiary.
Qualcomm is the world’s largest designer of smartphone processors, but it is trying to expand into more areas, including chips that run personal computers, where Intel remains the dominant player.
Like many other industries, Qualcomm doesn’t make its own chips. It outsources manufacturing to partners like Taiwan Semiconductor Manufacturing The company also manufactures chips for Nvidia Group and Advanced Micro Devices Company Limited
The Intel acquisition would potentially give Qualcomm access to its own manufacturing operations in the United States, as well as give Qualcomm the biggest brand in the traditional PC and server markets.
But taking on Qualcomm wouldn’t solve Intel’s problems. The suitor also has no experience handling manufacturing or implementing the science behind advanced manufacturing technology—an area where TSMC excels.
Qualcomm was involved in a controversial acquisition more than six years ago, when Broadcom Inc. tried to buy the company. Broadcom abandoned the offer after President Donald Trump blocked the dealciting national security risks.
