[News] Qualcomm’s Potential Takeover of Intel Might Have Minimal Impact on TSMC, But Not MediaTek

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For Intel, last week was like a roller coaster. On Monday, the company settled down plans for restructuring after the board meeting. On Friday, however, according to reports by The Wall Street Journal and Bloomberg, it turns out that Qualcomm has reportedly reached out to Intel regarding a potential acquisition offer, which would rank as one of the largest-ever technology mergers if the deal were to take place.

Should Qualcomm take over Intel, the mega deal may have limited impact on TSMC, the world’s largest foundry. However, Taiwanese smartphone chip giant MediaTek would be more heavily impacted, according to Taiwanese media the Economic Daily News and Commercial Times.

Citing domestic and foreign institutional investors, the Economic Daily News notes that regarding that the Broadcom-Qualcomm saga came to an abrupt end in 2018, the likelihood of the Qualcomm-Intel deal to realize might be low. However, if the acquisition does go through, it could create certain impact on Taiwanese manufacturers.

Citing remarks from Hong Kong-based and foreign semiconductor analysts, the report by the Economic Daily News points out that Intel’s weakness in its foundry unit would be its fatal flaw. With Intel’s yield rates and performance in the advanced nodes lagging behind TSMC, even if Qualcomm successfully acquires Intel, it is expected that Qualcomm would not reclaim the orders currently outsourced to TSMC, indicating the impact to the Taiwan-based foundry giant would be minimal.

Furthermore, the report suggests that from Qualcomm’s perspective, the more logical scenario would be to acquire only Intel’s chip design business. However, from Intel’s standpoint, they would prefer to sell the entire company as a package. Thus, the analysts cited by the report project that Qualcomm is more likely to spin off Intel’s chip manufacturing business and sell it to a U.S. private equity firm after the acquisition.

Actually, in early September, a report by Reuters suggests that Qualcomm, known for its Snapdragon processors used in smartphones, had investigated the possibility of acquiring parts of Intel’s design business to enhance its product portfolio, and was particularly interested in Intel’s PC business.

On the other hand, the story may be different for Taiwanese chip makers. A report by the Commercial Times notes that the acquisition could create pressure on MediaTek, which is Qualcomm’s main rival, as it may face even fiercer competition in sectors like AI PCs and automotive platforms, of which the Taiwanese smartphone chip giant is expected to launch new products next year.

In addition, the takeover would also have negative impact on AMD’s supply chain in Taiwan, including companies like ASMedia, which specializes in high-speed Switch IC, USB, PCIe and SATA controllers, Commercial Times indicates.

It is worth noting that the potential deal would face significant challenges, particularly with antitrust and national security concerns, a report by CNBC notes. For instance, Intel’s recent attempt to acquire Tower Semiconductor and Qualcomm’s bid for NXP Semiconductor were both blocked by Chinese authorities, the report says.

Read more

• [News] Qualcomm Rumored to Consider Acquiring Parts of Intel’s Chip Design Business, with a Focus on PC Segment
• [News] Intel to Turn Foundry Unit into Subsidiary, with Projects in Germany and Poland Delayed for 2 Years

(Photo credit: Qualcomm)