Intel shares rose after the Wall Street Journal reported that Qualcomm Inc. had approached the company about acquiring it, a potential record deal for the chipmaker.
The discussions took place in recent days, the newspaper reported, citing people familiar with the situation. However, a deal is not certain, according to the newspaper. Representatives for Intel and Qualcomm declined to comment.
The company’s shares rose 3.4% to $21.87 in New York trading Friday, after falling earlier in the day. The stock remains down 56% this year.
Intel, once the world’s largest chipmaker, has been struggling with declining sales and mounting losses — exacerbated by its loss of technological supremacy. The company’s market value is $93.5 billion, roughly half that of Qualcomm. Still, the acquisition would be the largest ever deal in the semiconductor market 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, including a multibillion-dollar deal with Amazon.com Inc. to make semiconductors for artificial intelligence and a plan to spin off Intel’s struggling manufacturing business into a wholly owned subsidiary.
Qualcomm is the world’s largest maker of smartphone processors, but it’s trying to expand into other areas, including the chips that power personal computers, where Intel remains the dominant player.
Like most companies in the industry, Qualcomm doesn’t make its own chips. Instead, it outsources manufacturing to partners such as Taiwan Semiconductor Manufacturing Co., which also makes chips for Nvidia Corp. and Advanced Micro Devices Inc.
The Intel acquisition would likely give Qualcomm access to its own production in the United States, as well as give it the biggest brand in the traditional PC and server market.
But Intel’s problems won’t be solved by a Qualcomm acquisition. The potential suitor also has no experience with manufacturing or studying the science behind advanced production technology—an area where TSMC excels.
Qualcomm was embroiled in a controversial takeover saga more than six years ago, when Broadcom attempted to acquire the company. Broadcom pulled out of the bid after President Donald Trump announced Block the dealCiting national security risks.