Report: Qualcomm to put Intel acquisition on hold until after US election

Qualcomm is weighing the complex geopolitical factors involved in a potential acquisition of Intel and is likely to wait until after the US presidential election in November before making any decisions, people familiar with the matter told Bloomberg. A key driver is getting more clarity on antitrust policy under the new presidential administration, as such a mega-merger between two chipmakers would be under intense regulatory scrutiny.

A combination of Qualcomm and Intel, both of which develop critical semiconductor technologies powering everything from smartphones to electric vehicles, would undoubtedly transform the industry. However, it could raise competition issues both domestically and abroad, especially in China. With the US-China relationship remaining fragile, Qualcomm is said to want the political landscape to stabilize before charting next steps.

Antitrust was a determining element when Qualcomm, in September, held informal talks with Chinese regulators in order to get preliminary opinions on a potential deal. No feedback has been provided yet as officials are waiting to see if Qualcomm proceeds with a formal offer first.

Moreover, Intel plays a central role in America’s self-sufficiency efforts in microchip production through major funding support. Thus securing policy support would be paramount.

Earlier this year, Intel revealed disappointing financials and forecasts that badly missed Wall Street expectations. These struggles triggered a massive reorganization, with CEO Pat Gelsinger committing over $20 billion to regain process leadership by 2025. However, turnarounds of this scale take time and money. To offset losses, Intel announced in January it would cut around 15,000 jobs worldwide by 2024 through restructuring.

The election could remove some deal complexity for Qualcomm. If Intel’s upcoming earnings in late October disappoint like last quarter’s $1 billion net loss, it may drive down the target’s stock price and valuation. A cheaper price tag could ease antitrust risk and secure a greenlight.

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