According to the latest industry surveys, Qualcomm is currently in acquisition talks with Intel. However, Tianfeng International Securities analyst Ming-Chi Kuo wrote that if the deal is finally reached, it may have a devastating effect on Qualcomm.
Ming-Chi Kuo’s article shows that Qualcomm has a big advantage in the AI chip market for smartphones, especially in the field of AI chips built into mobile devices. This type of chip can enable more efficient AI functionality, such as image recognition, voice assistants and other applications. Currently, Qualcomm is Apple’s biggest competitor in this regard and has a strong technology and market base. Therefore, Qualcomm should continue to enter this area and consolidate its leading position in the market.
Ming-Chi Kuo said that with the gradual rise of Windows on ARM (WoA), Microsoft’s latest Surface products have adopted Qualcomm’s ARM architecture chips, and he believes that Qualcomm has great growth potential there the PC market. It can improve regularly even without getting Intel. For Qualcomm, the focus should be on promoting the development of PC AI chips and establishing a complete AI ecosystem covering mobile phones and PCs.
Ming-Chi Kuo also pointed out that Intel’s dominant position in the general server market has little traction for Qualcomm. current situation.
Ming-Chi Kuo analyzed that Qualcomm currently has about US$13 billion in cash and equivalents and a market value of about US$190 billion. However, Intel has a market capitalization of US$ 93 billion, and the acquisition will still put significant financial pressure on Qualcomm, and it is more likely to have a negative impact on its current potential profitability. reduced to single digits, or even loss status.
The article pointed out that Qualcomm’s capital expenditure in the last quarter was about US$ 390 million. Instead of investing more than US$ 100 billion in acquiring Intel, it would be better to use these funds can be used to increase capital expenditure and stimulate the growth of AI. PCs and AI server chips This is not only less risks less and more efficient in management.
Ming-Chi Kuo continued by discussing possible antitrust investigations in various countries, the acquisition may not be completed smoothly in the short term. Even if Qualcomm is able to sell some of Intel’s assets to reduce financial and regulatory pressure, this is not a decision that can be made immediately. Guo believes that Qualcomm does not have a strong reason to acquire Intel, and even pointed out that if this merger happens, it will be a disaster for Qualcomm. He finally said, “Maybe one of the rumors I’ve heard is correct, that is, Qualcomm is carefully and passively evaluating the possibility of acquiring Intel due to the weight of some” unavoidable factors from the side out.”
Source:Ming-Chi Kuo Medium
