Qualcomm’s aim to acquire Intel could be biggest tech merger ever

Qualcomm has recently reached out to Intel in order to discuss a possible takeover of the struggling chipmaker, Wall Street Journal and Reuters report citing sources familiar with the matter. If prosperous, this could result in the biggest tech acquisition in history.

According to the individual informed on the situation, Qualcomm CEO Cristiano Amon is actively participating in the talks to purchase the $90 Billion chip maker. According to a second source of Reuters with knowledge of the matter, Amon has been aggressively exploring other possibilities for an arrangement involving the company.

Even though many of its subsidiaries are still profitable, Intel is perhaps in its worst condition in years. This August, the firm reported a $1.6 billion deficit and made significant layoffs, strategic changes, and a reduction of almost 15% of its personnel.

Following a strategy-focused board meeting on Monday, Intel CEO Patrick Gelsinger wrote a note to employees reiterating the company’s intention to making significant investments in its foundry business, according to CNBC, an undertaking that could potentially cost $100 billion over the next five years. It noted that it was considering outside funding.

The proposed acquisition could become the largest in the tech sector since Broadcom’s attempt to acquire Qualcomm for $142 billion in 2018, a deal that was scrapped by President Donald Trump due to concerns over national security, according to Reuters.

How Qualcomm would manage the acquisition of Intel’s contract manufacturing division is unclear. Since Qualcomm has not previously operated a semiconductor factory, or fab, while Intel has spent hundreds of billions of dollars over decades refining its fabrication process and hiring tens of thousands of engineers to do so in order to create chips with an atomic level of accuracy.