The world’s largest semiconductor company could interfere in the attempted financial tryst between Broadcom and Qualcomm.
According to sources tipping off The Wall Street Journal, Intel could mount an attempt to acquire Broadcom if it appears that that company’s takeover of Qualcomm would be imminent. The maker of PC processors has apparently been tracking the deal’s politics as it has progressed and, while none of the moving parts in this scenario have guaranteed outcomes, Intel is poised to act if necessary.
If Broadcom were to acquire Qualcomm for its current bid — which neglects Qualcomm’s ongoing buyout of NXP Semiconductors for more than $40 billion — the combined company would have a valuation near $220 billion, third to TSMC at approximately $222 billion and Intel at $245 billion. Intel, though, sees its counterpart’s focus in the lucrative 5G field as a boon in the waiting.
As with the Broadcom-Qualcomm deal, the Intel-Broadcom deal would need to go under piercing scrutiny from regulators worldwide. Some may say that the resulting behemoth could be too big for the silicon industry.
This week, the Committee on Foreign Investments in the United States ordered a 30-day stall for Qualcomm’s shareholder vote to elect a board of directors to look into the risk Singapore-based Broadcom of national security compromise. On Friday, Broadcom then sent a letter to congress to assure that $1.5 billion would go to talent development in 5G research and development. It also noted that it is on the way to redomiciling in the United States by June 6. Before the week closed, Qualcomm replaced its executive chairman of the board with a nonexecutive chairman to remove any hierarchy that would allow Broadcom ease in facilitating an acquisition if its board nominees were seated.
Intel, which is reportedly edging out Qualcomm in the provision of modems for Apple’s future iPhones, could be satisfied with no action should the Broadcom takeover fail.