It’s starting to look like semiconductor companies are intent on eating each other up until only one is left standing. The latest development? The Wall Street Journal reports that Intel is considering making a bid to acquire Broadcom.
Apparently they’re all just characters in a Highlander movie.
It’s unclear at this point if Broadcom’s bid to acquire Qualcomm will actually happen. Qualcomm’s board has repeatedly rejected the offer, claiming that Broadcom’s proposed price for the deal undervalues the company and that government regulators might not look too kindly on the merging of two giants in the semiconductor space.
According to the WSJ, Intel is also worried it would stand to lose if Broadcom succeeds in buying Qualcomm, since the combined company would be a pretty tough rival at a time when Intel is trying to make headway in 5G networking, Internet of Things, and other areas beyond the PC and server chip space where Intel has been the dominant player for many years.
So Intel is said to be watching Broadcom’s takeover bid. If it fails, Intel’s happy. If it succeeds, Intel may try to buy Broadcom so that it doesn’t have to compete with Broadcom.
Or maybe not. This is apparently just one of the possibilities the company is considering. It’d be an expensive proposition, and I’m sure there’d be regulatory challenges to this sort of deal as well.
An alternative could be for Intel to acquire some other smaller companies in order to shore up its business to better compete against a Broadcom/Qualcomm/NXP behemoth.
At this point Broadcom is probably best known for making chips used in networking solutions. Qualcomm makes processors used by many of the world’s most popular smartphones. And Intel dominates the PC and server space.
But the lines between those product categories is getting thinner every day. Qualcomm’s smartphone chips include integrated cellular modems and ARM-based chips are getting powerful enough to be viable as PC chips. Intel, meanwhile, has been trying for years to gain a foothold in the mobile and IoT spaces, both of which represent growth opportunities at a time when PC shipments are stagnant.