can the acquisition of "old" intel by "mature" qualcomm be realized despite obstacles such as antitrust?
2024-09-23
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regarding the recent rumors that qualcomm, the us communications giant and mobile chip leader, may acquire intel, a long-established cpu chip manufacturer, intel responded to a reporter from beijing news beike finance on september 23, saying that it would not comment on the rumors. as of press time, qualcomm has not yet responded.
if the acquisition is successful, it will become one of the largest acquisitions in the history of technology and will affect the global chip industry. on the day when the acquisition news came out, the share price of the acquirer qualcomm fell by 2.87%, while the share price of the acquired company intel rose by 3.31%, which also represents the market's view on the two parties of the intended acquisition. although both are chip manufacturing companies, in the era of mobile internet and the gradual rise of ai, qualcomm, which has been deeply engaged in smartphone chips, has a bright future, while the importance of cpu is gradually being replaced by gpu.
analysts believe that this acquisition is qualcomm's entry into the pc market and a layout to improve the industrial chain, but the prospects are still unknown. in addition, the acquisition of the two chip giants is believed to face many obstacles in antitrust investigations.
investors “vote with their feet”qualcomm's stock price is under pressurebehind
qualcomm ceo cristiano amon is reportedly personally involved in the negotiations to acquire intel and is studying various options for the deal. however, the negotiations between qualcomm and intel are still in the early stages, and qualcomm has not yet made a formal offer to intel.
judging from the trend of qualcomm's stock price, most of qualcomm's investors are obviously not optimistic about this acquisition. comparing the fundamentals of the two companies, as of september 23, beijing time, qualcomm's market value was us$188.2 billion, and it had about us$13 billion in cash, cash equivalents and securities, while intel's market value was about us$93.4 billion.
tianfeng international analyst ming-chi kuo said that even if the acquisition premium, related costs, debt assumptions, and subsequent management expenses are ignored, intel's market value of about $93.4 billion alone is enough to bring huge financial pressure to qualcomm. this will immediately have a negative impact on profitability, and may reduce net profit margins from the current 20% to single digits or even losses (with the foundry business being the most serious drag).
some industry insiders commented that intel is a 70-year-old man who has benefited from the pc era, while qualcomm and amd are 40-year-olds who have benefited from the mobile phone era. in contrast, nvidia is an 18-year-old youth who has demonstrated the possibilities of the ai era.
it is understood that intel has been focusing on a turnaround strategy, including emphasizing artificial intelligence processors and building a foundry business. in august this year, intel announced a 15% global layoff, and it is expected that tens of thousands of people will leave their jobs, and plans to cut costs by $10 billion.
so why did qualcomm acquire intel?
huaxin securities released a research report saying that qualcomm currently relies mainly on external foundries in chip manufacturing, so it hopes to further improve its industrial chain layout on the basis of enhancing its chip design and manufacturing capabilities through this acquisition. if qualcomm successfully acquires intel, it will accelerate the integration process of the semiconductor industry and promote the concentration of resources in advantageous enterprises; in addition, after the acquisition, qualcomm will have stronger technical strength and market share, and is expected to occupy a more important position in the global chip market.
guo mingchi said that the acquisition of intel will only help qualcomm's ai pc chip business, but from microsoft's commitment to woa (its latest surface models all use qualcomm processors/arm architecture), qualcomm's growth in the pc market is only a matter of time. although the acquisition of intel can quickly increase qualcomm's pc market share, it is also very costly. even without the acquisition, qualcomm can achieve growth in the ai pc market.
dai hui, a veteran in the communications industry, believes that intel's ai is also in the investment stage. it originally had more than 90% of the data center server market, but cloud computing has pulled up the competitor arm series chips. with the widespread application of chromebooks, the notebook computer market has been eroded. therefore, if it can merge with qualcomm in the field of chip design, it is not a bad way out.
guo mingchi analyzed that in order to thrive in the coming ai era, qualcomm's best strategy is to quickly generate cash flow from ai smartphone chips while expanding its dominance in the field. the company should also promote the development of ai pc chips and build a strong device-side ai ecosystem covering smartphones and personal computers. in addition, qualcomm also needs to quickly enhance its server ai chip capabilities through strategic investments and acquisitions.
acquisitions face many obstacles amid antitrust wave
if the acquisition is successful, it will be the largest acquisition attempt in the technology industry since broadcom's failed acquisition of qualcomm in 2018. but just as broadcom's acquisition of qualcomm failed, qualcomm's acquisition of intel will inevitably face many difficulties, the first of which is the antitrust investigation issue facing the acquisition.
guo mingchi analyzed that considering the antitrust investigations that may be faced in various countries, it is difficult for this acquisition to be completed in the short term. even if qualcomm sells some intel assets to reduce the financial and management pressure brought by the merger, it will not be finalized in a short time. the above uncertainty is not conducive to qualcomm's stock price.
"for these reasons, qualcomm's motivation to acquire intel is not strong. if this acquisition is successful, it may be disastrous for qualcomm. according to my investigation and understanding, qualcomm also expressed a conservative attitude towards acquiring intel in internal discussions. this confirms a rumor i heard: qualcomm is cautiously and passively evaluating the feasibility of acquiring intel because of pressure from some 'external force majeure'." said ming-chi kuo.
regarding this acquisition, minsheng securities commented that, on the one hand, qualcomm's acquisition of intel has high transaction costs, and qualcomm has not yet formally made an acquisition offer; on the other hand, given the large scale of the two chip giants, this transaction is bound to attract strict antitrust review. judging from the results of past semiconductor acquisitions, even if both parties are interested, the acquisition may not be successfully completed under the heavy pressure of antitrust and national security. referring to microsoft's acquisition of activision blizzard and the transfer of cloud gaming copyrights to ubisoft, in order to complete the transaction, qualcomm may have to sell some of intel's assets or businesses to other buyers.
luo yidan, financial reporter of beijing news shell
editor: yue caizhou
proofread by mu xiangtong
