Qualcomm Said to Wait for US Election to Decide Intel Move

Qualcomm Inc. is likely to wait until after the US presidential election in November before deciding whether to pursue an offer to buy Intel Corp., people familiar with the matter said.

San Diego-based Qualcomm wants greater clarity on the new occupant of the White House before deciding its next move because of the impact any future administration would have on the antitrust landscape and America’s relationship with China, according to the people, who asked not to be identified discussing confidential information. 

Qualcomm could opt to wait until after the inauguration of the new US president in January before deciding how to proceed, given the many complexities of a potential transaction involving Intel, some of the people said.

A combination of Qualcomm and Intel, whose products are key to the digital framework supporting everyday life — from smartphones to electric vehicles — would almost certainly draw intense scrutiny from antitrust regulators in the US and around the world. That includes China, a key market for both Qualcomm and Intel.

Qualcomm made a preliminary approach to Intel on a possible takeover of its struggling rival in September. In the same month, the company made informal inquiries with antitrust regulators in China to gauge their stance on any potential deal, some of the people said. Qualcomm hasn’t received any feedback from Chinese authorities, which are waiting to see if the company actually makes a formal bid, they said.

Intel is at the heart of the US government’s plan for a homegrown chipmaking renaissance, making the political backing for any deal crucial. The Biden administration has consistently framed the importance of its chipmaking policy in national security terms. Intel is in line to get the biggest allocation of funding under the 2022 Chips and Science Act, if it goes ahead with all of its factory building plans. Qualcomm has been speaking with US regulators and believes an all-American combination could allay any concerns, people familiar with the matter have previously said.

Making a bid after the election may bring other advantages for Qualcomm. Intel will report third-quarter earnings later this month. If that follows the pattern of the disappointing announcement of three months ago and the impact it had on the potential target’s stock price, it could make a deal considerably less expensive for Qualcomm. This time around, analysts are predicting another net loss in excess of $1 billion for Intel.

Qualcomm’s deliberations are ongoing and there’s no certainty that the company will decide to pursue an offer for Intel and the timing could change, the people said. Representatives for Qualcomm and Intel declined to comment, while the State Administration for Market Regulation in China didn’t respond to requests for comment.

Under Chief Executive Officer Pat Gelsinger, Intel has been working on an expensive plan to remake itself and bring in new products, technology and outside customers. As part of a recently announced shakeup, Intel intends to turn its programmable chip division into a standalone business and sell shares to the public or seek an investor for it.

Apollo Global Management Inc. has offered to make a multibillion-dollar investment in Intel, Bloomberg News reported last month, providing the chipmaker with a vote of confidence in its turnaround strategy and a possible alternative to any takeover by Qualcomm.

With assistance from Liana Baker and Ian King.

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