Chip-maker Intel needs a turnaround, not a takeover by Qualcomm

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Subscribe to enjoy similar stories. They say if there’s ever a Silicon Valley Mount Rushmore, the first face to be chiselled into stone would be that of Gordon Moore. The Intel co-founder’s famous prediction about the rate at which semiconductors would improve has been the bedrock of US technology leadership.

Such sentimentality around Intel and its contribution to the computing revolution is what makes any suggestion of a takeover a huge story. The reported approach by Qualcomm comes as Intel faces the toughest period in its 56-year history. In its weakened state—shares are down 53% this year —it is vulnerable to the disruptive effects of shopping by more prosperous rivals.

Intel CEO Pat Gelsinger should tune out the noise and stick to his turnaround strategy. Most analysts consider the deal unlikely to progress much further. Aside from the question of how Qualcomm would pay for it, there are other big hurdles, particularly concerning regulatory approval.

The merger of two huge US chip companies with a combined market value of $283 billion isn’t something that will be allowed to happen quickly—if at all. We also know little of the precise nature of Qualcomm’s interest. Reports had suggested the company was most keen on Intel’s chip-design arm but not the manufacturing business.

Intel’s chips still do well in the PC sector and also in data servers, which would complement Qualcomm’s position in the mobile market and give it a quick market share boost. But taking on chip foundries would be a burden—they are extremely expensive and Intel’s plans still require billions of dollars of investment if it’s to regain ground lost to Taiwan Semiconductor Manufacturing Co. That’s why more recent reports suggesting Qualcomm might want