Intel Gains on Report That Qualcomm Made Takeover Approach

Intel Corp. rose in premarket trading Wednesday after Bloomberg News reported that Qualcomm Inc. had approached the chipmaker about a potential takeover, citing people familiar with the matter.

Qualcomm declined to comment, while Intel didn't immediately respond to a request for comment. The report sent Intel shares up 2.3% to $28.25 in premarket trading. Qualcomm shares were little changed at $118.50.

A deal would combine two of the world's largest semiconductor companies, creating a behemoth in the industry. Intel is the world's largest chipmaker by revenue, while Qualcomm is the world's largest supplier of mobile phone chips.

The report comes as the semiconductor industry is consolidating. In recent years, there have been a number of large mergers in the chip sector, including the $40 billion acquisition of NXP Semiconductors by Qualcomm in 2016 and the $37 billion acquisition of Altera by Intel in 2015.

A combination of Intel and Qualcomm would create a company with a dominant position in the semiconductor market. The combined company would have a market capitalization of over $280 billion and would be a major player in the development of next-generation technologies such as artificial intelligence and 5G wireless networks.

However, there are also a number of challenges that would need to be overcome in order to complete a deal. One of the biggest challenges would be the regulatory approval process. The combined company would have a large market share in a number of key markets, which could raise antitrust concerns.

Another challenge would be the integration of the two companies' different cultures and business models. Intel is a more traditional semiconductor company, while Qualcomm is a more focused on mobile phone chips. Integrating the two companies could be a complex and time-consuming process.

Despite the challenges, a deal between Intel and Qualcomm would be a major coup for both companies. It would create a semiconductor powerhouse with a dominant position in the market and would be well-positioned to take advantage of the growth in next-generation technologies.