Qualcomm may take over struggling rival Intel in the biggest tech M&A deal ever: Report

With both Qualcomm and the currently struggling Intel looking to profit from the AI boom, it could be the largest tech M&A deal ever, though it is uncertain

Chip giant Qualcomm may take over rival Intel, according to a Wall Street Journal report, which cited unnamed sources and added that this comes amid the latter, once the world's most valuable chip company sees its shares plummet about 60% so far this year.

A smartphone with a displayed Intel logo is placed on a computer motherboard in this illustration taken March 6, 2023. (Dado Ruvic/Reuters)

However, the deal is uncertain, with it potentially attracting antitrust scrutiny and also requiring Qualcomm to sell assets or parts of Intel to other buyers, the report read.

If it does happen, it could be the largest tech M&A deal, even topping Microsoft’s $69 billion Activision Blizzard billion acquisition, according to the report.

This comes at a time when both Qualcomm and Intel are looking to profit from the AI boom, despite both being overshadowed by Nvidia.

Intel is about to get up to an $8.5 billion grant potentially to set up US factories, with CEO Pat Gelsinger trying to turnaround the troubled chipmaker by manufacturing chips on contract for others, while Qualcomm, led by CEO Cristiano Amon already having approached Intel for making its chips in Intel's factories, which it backed out of after technical missteps, according to the report.

What happened to Intel?

The company said it planned to lay off thousands of employees and pause dividend payments to save costs after reporting a loss of $1.6 billion for the second quarter, compared with a $1.5 billion profit a year earlier.

Intel also announced earlier this week that it would further separate its chip manufacturing and design operations, along with halting Germany, Poland, and Malaysia factory projects until demand picks up again.

However, rumours of the company splitting up emerged after it reported separate financial results of its manufacturing operations earlier this year, with analysts arguing it should be split and specialise in either chip design or chip manufacturing, according to the report.