Intel, once the dominant force in American semiconductor manufacturing, is now grappling with critical choices as competitors and investors circle the embattled tech giant.
Qualcomm has reportedly made an informal approach to acquire Intel, while Apollo Global Management is proposing a multi-billion-dollar investment in the company. Both offers highlight the extent to which Intel’s position has weakened, underscoring the challenges it faces in maintaining its historical leadership in the industry.
The potential Qualcomm deal poses several hurdles, including significant antitrust concerns and questions about strategic fit. Qualcomm, primarily known for its expertise in cellular technology, does not manufacture its own processors, raising uncertainty about whether it would want to absorb Intel’s foundry business, which fabricates semiconductors for other companies. This division is a key part of the Biden administration’s push for domestic chipmaking under the CHIPS and Science Act, making any changes to its ownership politically sensitive.
Financing the acquisition would also be a challenge, given Intel’s current market value of $93 billion. Experts have noted that while Intel and Qualcomm may have limited business overlap, the regulatory environment is cautious about large mergers in strategic sectors, and a deal could face intense scrutiny. Qualcomm, for its part, has stated that it is not considering a hostile bid, avoiding the complications that have tripped up past tech takeovers.
Meanwhile, Apollo Global Management’s interest in Intel appears to be more focused on supporting the company’s turnaround strategy. Apollo is reportedly considering a significant investment in Intel, similar to its previous involvement with Western Digital, and already holds a stake in Intel’s chip manufacturing operation in Ireland. This move could be seen as a vote of confidence in Intel’s efforts to regain ground in the competitive semiconductor space, particularly in areas like artificial intelligence (AI) chips, where it currently lags behind rivals such as Nvidia.
However, any investment would also raise questions about the billions of dollars Intel has been promised through government subsidies aimed at boosting domestic chip production. With Intel viewed as a crucial component of US national security, the Biden administration is likely to watch closely as the company navigates these offers and weighs its options.
Intel, for its part, is taking steps to restructure. It has already announced plans to give its foundry division more independence, making it easier to attract capital or potentially sell the unit in the future. The company is also exploring selling parts of its stake in Altera, a chipmaker it acquired in 2015.
These developments come as Intel continues to face significant challenges in the tech market. Although it has secured important contracts with major clients such as Amazon and the US Department of Defense, it remains under pressure to catch up to competitors in the AI and semiconductor spaces.
The New York Times and Tip Ranks contributed to this report.
