Qualcomm's delays Intel acquisition plans until US election: Here's why
What's the story
Qualcomm has delayed its plans to acquire parts of Intel's design business, until after the US presidential election in November 2024.
The company is taking a cautious approach due to potential regulatory challenges and is waiting for clarity on the next government's stance toward antitrust enforcement and relations with China.
This strategic patience could give Qualcomm an opportunity to negotiate a good deal with Intel, which posted $1.6 billion net loss for Q2 2024. Analysts expect another $1 billion loss.
Acquisition plans
Qualcomm's interest in Intel's PC segment
Qualcomm's interest in acquiring parts of Intel was piqued by a desire to expand its product range. The company was particularly interested in Intel's PC segment.
However, these plans have been temporarily shelved until there is more certainty regarding the US political landscape post-election.
The tech giant is not only awaiting the November election results but also the inauguration of the new president in January 2025, before making any definitive moves.
Information
Qualcomm's history with regulatory scrutiny
Qualcomm's cautious approach is understandable considering its past run-ins with regulatory scrutiny. The company has previously been under antitrust concerns from European regulators. By delaying its acquisition plans, Qualcomm hopes to steer clear of potential challenges and unnecessary friction with US regulators.
Strategic importance
Intel's role in US chip production
Intel plays a critical role in the US government's push to increase domestic chip production.
As the biggest recipient of the 2022 Chips and Science Act, Intel will get as much as $8.5 billion if it achieves its factory expansion goals.
Any potential deal between Qualcomm and Intel would require careful political support given Intel's importance in US chipmaking aspirations.