Qualcomm’s potential purchase of beleaguered Intel would likely raise antitrust, foundry concerns

Analysts have expressed concerns about Qualcomm’s potential acquisition of Intel. While such a deal could diversify Qualcomm’s business, it would also involve taking on Intel’s loss-making semiconductor manufacturing unit. Turning around or selling this unit could prove to be a significant challenge.
Furthermore, the proposed merger would face intense antitrust scrutiny worldwide. As the largest deal in the semiconductor industry, it would combine two major players in the smartphone, personal computer, and server markets, potentially creating a market-dominating behemoth.
Aditya Soni and Yuvraj Malik for Reuters:
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Shares of Inte rose nearly 3% on Monday, after media reports late on Friday about Qualcomm’s early-stage approach for the struggling chipmaker. Qualcomm’s shares were down 1.8%.
“The rumored deal between Qualcomm and Intel is intriguing on many levels and, from a pure product perspective, makes a certain degree of sense as they have a number of complementary product lines,” said TECHnalysis Research founder Bob O’Donnell.
“The reality of it actually occurring, however, is very low. Plus, it is unlikely Qualcomm would want all of Intel and trying to break apart the product business from the foundry business right now just would not be possible,” he said.
Once the dominant force in the semiconductor industry, five-decade-old Intel is facing one of its worst periods as losses mount at the contract manufacturing unit it is building out in hopes of challenging TSMC.

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MacDailyNews Take: Yup.
[Intel’s decision to pass on Apple’s iPhone] has to be close to the top of the list of Biggest Business Mistakes in History. — MacDailyNews, May 17, 2013

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