Highly possible that Qualcomm considers acquisition within two weeks! Intel's stock price surged more than 10% intraday

Two chip giants may merge? Different media outlets reported within two weeks that Qualcomm may consider acquiring Intel. Intel's stock price surged this Friday.

During the midday trading session on Friday, September 20th, Eastern Time, The Wall Street Journal cited sources familiar with the matter as saying that Qualcomm has recently been in contact with Intel regarding a potential acquisition. This is the second time this month that media reports have suggested Qualcomm's interest in acquiring Intel. Two weeks ago, Reuters reported that Qualcomm was considering acquiring Intel's chip design business to enhance its own product portfolio, and also considering acquiring other Intel businesses, such as the server business, although this business is not significant to Qualcomm.

Subsequently, Bloomberg reported that representatives from Intel and Qualcomm declined to comment. However, stock market investors quickly reacted to the news. The stock prices of the two companies moved in opposite directions. Intel surged, while Qualcomm's decline widened.

After the news of discussions between Qualcomm and Intel about a potential merger surfaced, Intel's stock price plummeted over 3.7% to refresh the daily low during the midday trading session, then quickly rebounded to erase the losses and turn positive, hitting a daily high of $23.12, up nearly 9.4% intraday, rebounding about 13.6% from the intraday low of $20.35. Due to excessive price fluctuations, trading was temporarily halted. In the end, Intel closed up 3.3%.

After the news broke, Qualcomm's stock price saw a sharp increase in intraday decline, dropping from above $170.50 to $164.30 to refresh the daily low in just about 10 minutes, with the intraday decline expanding from less than 2% to 5.5%. The decline narrowed towards the end of the trading session, ultimately closing down nearly 2.9%.

Since the beginning of this year, as of Thursday's close, Qualcomm's stock price has risen by about 20%, while Intel's stock price has fallen by about 58%. After a rebound on Friday, Intel's market value exceeded $93 billion at the close. Given this scale, if Qualcomm were to acquire Intel, there would certainly be regulatory risks to overcome.

The Wall Street Journal also mentioned that insiders warned that the acquisition deal is far from certain. Even if Intel is willing, such a large-scale transaction would almost certainly face antitrust scrutiny. However, the deal could also be seen as an opportunity to enhance America's competitive advantage in the chip sector. To facilitate the deal, Qualcomm may intend to sell Intel's assets or part of its business to other buyers.

While Qualcomm's potential acquisition news surfaced, Intel is currently facing a significant crisis, the likes of which it has not seen in its 56-year history.

In early August this year, Intel released what analysts called the "worst earnings report ever" for the second quarter performance, with revenue regressing to the mid-2010s, a year-on-year revenue decline of 1%, and the third-quarter revenue guidance at a maximum decline of 11%, while analysts had expected growth of over 1% The company also announced plans to lay off 15,000 people, accounting for over 15% of the total number of employees, and to suspend dividends for the first time since 1992 starting from the fourth quarter.

In late August, Chen Liwu, a director of Intel for two years, announced his resignation, adding to the woes of Intel at a critical period of revitalization. It is commented that Chen Liwu has rich experience in the semiconductor industry, and his departure will undoubtedly have a negative impact on Intel's future development. Earlier this month, according to the media, Intel's latest 18A manufacturing process reportedly failed Broadcom's tests, making the prospect of turning the company's foundry business around even more bleak.

Recently, Intel is actively brewing a "self-rescue" plan.

At the end of August, Wall Street News mentioned that media reports indicated Intel is discussing various options, including splitting its product design and manufacturing business, and cutting back on factory investment projects. Morgan Stanley and Goldman Sachs, long-term partners of Intel, are providing comprehensive strategic advice, including potential mergers and acquisitions.

Earlier this month, another media report stated that Intel CEO Gelsinger will propose a plan in mid-month, including selling off businesses that the company can no longer fund, such as the programmable chip division Altera. This plan may also include suspending or completely halting its $32 billion factory project in Germany. The plan aims to reduce the company's overall costs and reshape capital expenditures.

Last week, Intel's board of directors held a three-day meeting, considering various strategic options, including cutting billions of dollars in factory projects, selling off parts of subsidiaries, including previously acquired Mobileye and Altera, and possibly spinning off core businesses into independent companies.

CEO Gelsinger's plan includes restructuring Intel's foundry business IFS into an independent subsidiary, considering allowing it to obtain independent external financing; delaying the construction plans in Magdeburg, Germany and Poland by about two years, completing the construction plans in Malaysia, and expanding in the United States unaffected; streamlining and simplifying the x86 product portfolio; by the end of this year, reducing or exiting two-thirds of global offices together; and selling part of the stake in Altera