Qualcomm may still buy Intel but not right now

A few months ago, Qualcomm was caught in a rumour that it may acquire parts of Intel’s design operations, specifically targeting the PC segment, to strengthen its position and broaden its product range. However, as per the recent Bloomberg report, it has been revealed that this idea is now on hold, until the US election. It indicates that the outcome of the US presidential election next month is expected to influence Qualcomm’s decision on whether to pursue an acquisition of Intel Corp.
Qualcomm is taking a wait-and-see approach before making any decisions about acquiring Intel. This indicated that the company wants to see who will be in the White House after the presidential election in November and assess how the new administration will handle antitrust matters. This cautious approach might even extend to waiting until after the presidential inauguration in January 2025, before making a move on Intel.
It’s no surprise that Qualcomm is being cautious, given the regulatory scrutiny that comes with major acquisitions. The company has faced its own share of antitrust challenges in the past, including a Statement of Objections from the European Commission in 2015. By waiting to see how the political landscape shakes out, Qualcomm can better navigate the regulatory environment and avoid any potential roadblocks. The report, citing sources, claims that the company hopes to seek greater clarity on the incoming president’s policies, as the new administration could significantly affect the antitrust environment and US-China relations.
This strategic pause also gives Qualcomm time to evaluate the potential benefits and risks of acquiring Intel. With the US presidential election just around the corner, Qualcomm is wisely taking a measured approach to ensure the best possible outcome for its business.
That being said, Intel plays a significant role in the US market. It has a crucial role in Washington’s plan to revive domestic chip manufacturing makes political backing vital for any potential deal. As the largest recipient of funding from the 2022 Chips and Science Act, Intel is set to receive up to $8.5 billion, contingent on proceeding with its factory construction plans. This significant investment underscores the US government’s commitment to supporting Intel’s expansion and bolstering domestic chip production.
But it is also true that the speculations are that the Intel will suffer a great loss in the coming years. According to the analysts’ projection quoted by Bloomberg, Intel is likely to suffer another net loss of over $1 billion this time around. The struggling chipmaking company reported a $1.6 billion net loss for the April to June quarter.